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If you are looking for investment opportunities this year, commercial real estate is an attractive option according to a recent BusinessWeek article. Several leading investment groups are re-entering the commercial market in full force. The Geneva Group can be your partner in finding the right opportunities in commercial real estate.
“Among all the investment vehicles currently available in the US, commercial real estate now stands heads and shoulders above its peers when it comes to its level of risk, protection from inflation, and of course, yields. According to the latest Moody’s/REAL Commercial Property Index (CPPI) for January, released on March 22, commercial property pricing improved 4.2% over the five months prior to January from an eight year low last year. Values for apartment complexes, office buildings, hotels and, especially trophy properties in the nation’s leading markets, are improving very rapidly after touching bottom.
Of this movement, Dan Fasulo, managing director of Real Capital Analytics (RCA), which provides the repeat-sales data underlying the CPPI, remarked to Businessweek that “We’re well into the recovery in the prime markets in the U.S. and that recovery has started to expand into secondary markets around the country…Real estate is looking good versus other asset classes.”
The optimism in the commercial real estate sector has prompted some of the world’s leading investment shops to expand their exposure to property and commercial debt. One of these includes New York-based Blackstone Group LP, which has returned to purchasing properties and debt backing commercial space in a big way since the recession subsided. In addition to the billions of dollars the firm spent in 2010 on large portfolios of properties, Blackstone recently announced it would raise an additional $10.0 billion fund later this year to target the commercial property sector. Carlyle Property Group, a competing private equity shop, would also raise a multi-billion dollar fund to get in on the sector before this unique window of opportunity closes.
All that being said, the commercial real estate sector continues to feel the weight of distressed properties and a tremendous amount of debt taken on by property traders during the boom years that will be difficult to refinance. Businessweek’s article acknowledges, however, that depending on which side of the equation an entity is on, distress can be an opportunity or a burden.
For a complete look at the opportunities and difficulties that currently exist in the commercial real estate sector, please see the full article on Businessweek’s site.”
View the full article on BusinessWeek: Commercial Real Estate ‘Looking Good’ Versus Other Investment Vehicles
Contact Jarred Elmar today for your commercial real estate investment opportunity.