Recent uncertainty about sovereign debt, including the downgrade of the US credit rating has resulted in turmoil in the equities market and wildly unpredictable fluctuations in traditional investment portfolios. This uncertainty, with a likely downtrending future, has once again spotlighted the attractiveness of the commercial real estate market as an investment. Unlike the residential real estate market which is still subject to a backlog of distressed properties, commercial real estate continues to offer greater stability with low overhead costs and administrative hassles, using the Geneva Group as your partner. There are several operating advantages that come with investing in commercial real estate as well. The first of these is the stability of commercial tenants who usually sign long term leases. These tenants include companies which are national franchisees or professionals such as accountants, physicians and personal service providers. Tenants which are franchisees are supported by a nationally proven network, experienced in the success of their business models. Non-franchisee tenants are acutely attuned to the needs of their local neighborhood, may benefit from municipal incentives, and draw on years of experience while maintaining their connection to the local economy. Unlike residential renters, commercial lessees are more responsible and stable rent-payers. The real estate investment also has the incredible advantage of being a tangible asset.

Commercial real estate projects qualify for non-recourse financing, enabling the borrower to finance the purchase of the property with the property itself as a collateral, and limiting your personal liability. Commercial properties generate steady passive cash-flow that adds significant annual income for the balanced investor. With the recent evolution of the economy toward being retail and service-driven, and the federal government’s focus on getting employees back to work, commercial real estate is poised to grow at a faster rate than the residential sector. Due to the recent economic downturn, there is also a shortage of move-in ready commercial space and it commands a premium in many markets across the nation. According to CoStar’s Investment Grade Index, values of commercial properties are showing an increase of 11.9% for the quarter, while the general-grade real estate increased 4.7% in the same time-period. Office buildings increased 17.4% in the second quarter and industrial properties increased 10.4%. According to the same report, transaction activity increased 24% from the first quarter of 2011 to the second quarter, representing a 33% increase in investment-grade transactions. Commercial real estate has been attracting ever greater attention from individual investors while remaining a priority of most institutional investors, due to the improving space market fundamentals and the low yields of alternative investments.

The Geneva Group is a real estate investment company aiming to generate capital gains, passive income, and long-term equity appreciation for its owners and Investor/lenders through the purchase and leverage of real estate investments. Contact us to find the right opportunity for you!

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