T I P S F O R I N V E S T I N G I N C O M M E R C I A L R E A L E S TAT E F R A N K J E R M U S E K

• Commercial real estate assets, if managed in the right ways, can offer stability and serve as good hedge against the stock market.

• Investing in office and retail space, restaurants, warehouse, golf courses, etc., is a great way to increase the amount of money you make annually - when it is done right.

• According to an article published by Investopedia: “Investors in commercial real estate can make money via appreciation when they sell, but most returns are generated through rents collected from tenants. Long lease terms can help mitigate economic fluctuations and their impact on income,” (Top Tips for Investing in Commercial Real Estate).

• This means it’s crucial to study market trends and know where and when are the right times to invest in such opportunities.

• One main thing to keep in mind is knowing where the best places are to invest in commercial real estate.

• According to Investopedia:

• “A study by PwC and the Urban Land Institute predicts strong growth in the commercial real estate market over the next couple of years. Some of the industry’s most promising cities according to the survey include Houston, where the energy industry is expected to drive growth; Austin, which has a strong industrial base, low business costs and an influx of millennials seeking housing…”(Top Tips for Investing in Commercial Real Estate).

• Knowing these key areas are beneficial for investments across the board.

• Many areas to look at when it comes to deciphering whether or not a certain city is worth looking at for investment are: industry, job growth, diversity in economy, low business costs, and low cost-of-living.

• Indirect ownership is another category to analyze when looking at investing in commercial real estate.

• Indirect ownership means that profits or beneficial interests, in this case commercial real estate, are owned by or for a corporation, partnership, estate, or trust that is considered owned proportionately by or for its shareholders, partners or beneficiaries.

• Commercial mortgage-backed securities are great ways to tap into commercial businesses.

• According to Investopedia, they are “interest-paying bonds that hold bundles of commercial mortgages Issuance of CMBS is expected to rise $150 billion in 2017 from an anticipated $115 billion in 2015, according to the Urban Land Institute’s Real Estate Consensus Forecast,” (Top Tips for Investing in Commercial Real Estate).

• To learn more about tips for investing in commercial real estate, read Investopedia’s article written by Joseph A. Dallegro here.