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Investing in Commercial Real Estate in This Environment – Good Idea?

Submitted by D. Saperstone
By definition, commercial property is used solely for business purposes. A very broad generalization of “commercial property” but strangely accurate. Shopping mall, offices buildings, apartments, gas stations, hotels and industrial parks are all commercial properties and represent investment opportunities for those investors who can tolerate some degree of risk. Unlike residential development projects which have suffered mightily over the past several years due to the sub-prime lending crisis, commercial investment grade properties have escaped  much of the carnage. Commercial properties have certainly taken a bit of a hit during this time frame but we liken the damage to a flesh wound as opposed to a life threatening direct hit. There are several reasons commercial real estate has been able to survive the sub-prime mess and in some cases actually prosper as the US housing market crumbled under the weight of poorly underwritten mortgages:

Is this a good time to acquire real estate assets as part of a balanced portfolio? We unequivocally answer YES!  The performance of some classes of commercial real estate assets will exceed others, for instance apartments versus retail, but in our opinion, both will produce better results over the long haul then non-real estate options. Smart investors do their homework, study risk and find strength in every market. In our professional opinion, this is a very good time to invest in commercial real estate.

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