In this week’s financial news, an article from The Wall Street Journal* titled “Wall Street Is Ready to Scoop Up Commercial Real Estate on the Cheap” struck a chord with us.
That’s a bold statement, but it’s a telling one also.
The article mentioned that many funds and institutions on Wall Street are raising capital now to the tune of $Billions in preparation to purchase quality real estate at discounted prices. But this isn’t the first time Wall Street has prepared in this way.
Remember, in 2008, according to this SeekingAlpha article, most commercial real estate value was down by 15% (or more in many cases). Many funds and institutional investors started to pick up assets for significant discounts.
According to Green Street’s Commercial Property Price Index Report**, the combined commercial real estate values in the United States have almost tripled since 1998. Let’s not forget that commercial real estate typically has strong rental returns as well as value increases through the lifecycle of ownership.
So what does that mean for the rest of us, and why can’t you have the same strategy?
If you have large sums of money stashed away and time to do the research to invest and then manage a commercial property, the next couple of years could offer you the opportunity to pick up some assets for a discount.
If you don’t have large sums of capital freely available and certainly don’t have the time to manage commercial real estate, participating in a fund like CalTier’s Portfolio Fund could be a great option.
Some key items about the fund:
- Low entry: The entry is only $500. You can add more as your budget allows and even use the auto-invest feature each month.
- Distributions: We have paid out 22 monthly consecutive distributions to investors***
- Portfolio: Your investment is spread across a portfolio of multi-family assets. View the portfolio here.
- Tax Efficiency: Many of our investors use a Self-directed IRA to invest tax-efficiently. You can learn more about how that might work for you here.
- Strategy: Our strategy is to invest in class C & B multi-family assets where we can reposition them directly or with partners and raise the value. You can see more about our strategy here.
- App or web: Manage everything from your phone or computer. You can download the app here.
*www.wsj.com subscription is needed to view the full article
* *Green Street’s Commercial Property Price Index® is a time series of unleveraged U.S. commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted.
***Past performance is not a guarantee of future performance