You may think that getting help with capital management is easy, but it depends on what level of capital you are concerned with and what projects you have in mind. If you want investment advice on commercial real estate private equity funds that focus on debt strategies, there is no shortage of companies that say they can help you, but how do you know which ones you can trust?
Finding The Right Capital Management Company For You
When you are dealing with large amounts of money, you need to know you can trust the advice you are being given. Taking a close look at a capital management company website will give you much of the information about them you need, and if it doesn’t, steer clear of using their services.
For example, the website of Pembrook Capital Management hides nothing about them at all. It tells you who leads the team of experts, when the business started and the areas they specialize in. You can even look back at some of the press releases to see what deals they have arranged in the past, so you know you can trust them to set up the right deal for you.
With assets in many parts of the US, Pembrook Capital Management has sourced and reviewed over $19 billion of commercial real estate investment since 2007.
Commercial Real Estate
Commercial real estate prices in the US have more than doubled since the financial crisis of 2009, making it a sound investment in recent years. The challenges facing the US economy after the crash are well-documented, high levels of debt, low productivity growth, and an aging population being just three of the biggest problems. In spite of these challenges, the economy will improve, and one way to gain direct exposure to that improvement is by investing in commercial real estate.
As an asset, commercial real estate offers investors advantages relative to other types of assets. It offers investors an attractive return potential that is reasonably safe from the daily ups and downs of stocks and shares, and this is largely because it is not traded on the public markets. As a result, a direct investment into commercial real estate is sheltered from the short-term market events.
If it is a short-term investment you are looking for, commercial real estate might not be your best option. It can take a while to sell, but for those who are after more long-term investment solutions, they stand to reap the benefits of their patience.
There is also the option to gain an income from real estate investments in the form of rents. This can help to meet other liabilities while the investors are waiting for the property to be sold. In some cases, it is found to be a better option and the real estate is taken off the market. Of course, there are headaches with renting out commercial real estate, and for some people, it can be too much hassle. There are rules and regulations to follow, and these can differ depending on which state the property is in. Tenants themselves can be troublesome, and if they do not pay their rent, it can be difficult to make them vacate the property. If it is up for sale, this situation can affect the realizable value, which is the opposite of what the investor wants.
Investing in commercial real estate can either be done as a direct investment or an indirect investment. Institutions tend to look for alternatives to direct investment because of the large amount of capital needed to build a reasonable portfolio, and often-private funds are considered because they can have the same advantages as direct investing.
Investment return figures calculated over the last 25 years show an average return on commercial real estate investment of 9.2%, and when you take into account that in its worst year back in 2009, it lost 22.1%, it shows how well it normally does. In comparison, corporate bonds averaged a growth of 6.7% over the same period.
The number of foreign investors buying and selling commercial real estate in the US is rising. Although it is said they tend to deal in the smaller commercial properties, the economic growth of the US, even though it is at a modest and steady pace, is a contributing factor to making it an attractive option for investors from other countries. Economic growth might not be fast, but compared to the rest of the world, the US remains one of the safest bets for foreign investors.
Commercial real estate seems to be the popular choice for them because it is a safe investment when they are looking to diversify their portfolios to generate returns outside of their own country. Nearly two-thirds of the foreign investors in 2016 were non-resident in the US, with large numbers of them being from China, Mexico, the UK, and Venezuela. Most of them purchase the commercial real estate as an investment, but there was a small proportion that purchased property for their own business.
Get The Expert Advice You Need
It does no matter if you are thinking of investing in a small commercial property or a very large one that’s worth millions of dollars: you should always get advice from experts in the field of commercial real estate. It is far too easy to make an error and end up with something that will not make you the money you expected. Working with the professionals, that is far less likely to happen. Even simple things like location can make a huge difference as to whether a piece of commercial real estate is a good investment or not, and the experts will have the knowledge and experience to be able to advise you accordingly.
The only other thing that all investors in commercial real estate need to consider is the tax implications. This depends greatly on so many different factors, and also on personal circumstances, so this is something else you need to discuss with experts.