It’s no secret that the investment asset class preferred by affluent investors is commercial real estate (CRE).
Exclusive groups like Tiger21, a peer-to-peer network of ultra-high-net-worth individuals, and even Ivy League university endowments allocate a large portion of their portfolio to commercial real estate for their income and appreciation benefits.
While many investors know the value commercial real estate would add to their investment portfolios, current professional obligations do not allow them to participate. Some wait until they gain the necessary knowledge, experience, or market insight before they get started and profit from CRE. Still, others are intimidated by the high barrier to entry – commercial real estate is generally higher priced than residential real estate.
Did you know that most investors in commercial real estate are not actively involved?
Most investors which quietly profit from commercial real estate are not actively engaged. They never acquire any specialized knowledge or spend time and effort looking for assets to acquire. They are too busy pursuing their career or operating their own business to invest actively, so they partner with a private investment group.
A fund or syndication group will often review and analyze hundreds of potential assets, send several offers, and LOIs. Then they typically hire a team to complete the due diligence; a general contractor, a leasing agent and then the ongoing team to manage it all and be successful in commercial real estate investing.
They quietly profit from commercial real estate without being actively engaged. They never acquire any specialized knowledge or spend time and effort looking for assets to acquire because they trust others to do so. Like the successful manager; however, successful real estate investors know how to find and surround themselves with individuals with specialized skills and the same goals to be successful.
The successful investor also understands the power of leverage.
They leverage the expertise and capital of those with more experience to maximize their own time and capital. That’s why these successful investors are drawn to private investment funds specializing in commercial real estate.
These funds have all the resources needed to find and vet deals and to manage the day to day challenges, thereby allowing investors to concentrate on other endeavors like their profession or business while profiting from commercial real estate. Additionally, by leveraging capital across multiple funds, the successful passive investor can diversify across several subsegments of commercial real estate like retail, office multifamily, self-storage, etc. that is not possible with active investment.
Investing in a private investment fund or syndication offers the best of both worlds to the busy professional investor
What if you don’t have time to be an active investor but desire the benefits like higher rates of return and the ability to pursue a particular investment philosophy? What if you could enjoy the freedom of being a passive investor while reaping higher returns and more control over your investments?
Private real estate investment funds allow an investor to be active where it matters and passive where it’s profitable.
You can enjoy the freedom a passive investment affords with the possibility of higher returns enjoyed through active investing. With private investments, investors can align their investment objectives with that of the management. Unlike public companies where access to management is prohibitive; private funds often make their management teams accessible and available to answer questions about their investment philosophy, strategies, and goals.
Follow the path of other successful investors. Depend on the experts and their team to source and manage commercial real estate assets while you focus on your business or profession.
