Commercial Real Estate in South Florida, Free Investment Advice
This is an issue that I have heard about from many clients and new prospects about so I thought it would make for a fine blog topic! I always love to provide value and what better way to do so than with good solid free advice? It seems that there are some people with cash on hand and confusion about where to invest it. Banks are offering virtually no interest, the stock market is always a gamble and the real estate market is going crazy in lots of ways so what to do? Let’s start with what not to do! Office, retail and to a lesser extent multifamily properties are in flux now. Most are losing money each month as businesses file for bankruptcy, downsize or simply not pay all of their rent. These properties have been extremely difficult to valuate because of the declining income streams. Until we reach the bottom of the market real valuations can’t be made.
What do I recommend you do? Long a beacon of safety, the net leased investment, is still popular but more tricky than before. The reason is that this type of investment is akin to a corporate bond, you are betting on the wherewithal of a company, and as long as they stay in business you get an attractive rate over 4%. The investments are tricky now because so many companies and even industries are contracting or even disappearing. Multifamily properties in high demographic areas represent solid investments still. The key component is to analyze the accounts receivable to see what percentage of rent is being paid each month and by whom. It isn’t hard to recommend the most solid commercial real estate investment these days. It is anything to do with industrial real estate.
The big investment and institutional players are investing all of their money in industrial properties that are fully leased to tenants in the ecommerce business. As a result, there is more demand than supply, causing the yields to drop. Other than these types of investments I am advising people to wait until the market hits bottom before investing. At that point we will have price certainty and there will be opportunities to reposition properties that were foreclosed on. If you are looking to invest in South Florida commercial real estate please call me and I would be happy to discuss the options that are available in much more detail.
As always thanks for reading, stay safe and have a great day.
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