Why Should I Invest in Commercial Real Estate?
In 1928, John D. Rockefeller Jr. and a team of investors purchased a large tract of real estate in the center of Manhattan, New York. Initially, the syndicate planned to build landscaped gardens, office buildings, retail shops and a new opera house for the Metropolitan Opera. However, the stock market crash of 1929 and resulting Great Depression caused the Metropolitan Opera and the rest of the syndicate to abandon the plan, leaving Rockefeller Jr. as the sole developer and financier of the project.
Undeterred, Rockefeller Jr. drafted a new plan, this time to build a plaza where businesses and people would congregate. The ambitious plan was the largest private building project in modern history. Most of his peers decried the move as foolish; none were willing to invest with him. As you are probably aware, that real estate project turned into the Rockefeller Center, the geographical center of Manhattan and one of the most well-known destinations in the world. As a result of his gamble, Rockefeller Jr. became one of the largest real estate holders in New York City.
The moral of this story? Investing in commercial real estate is almost always a safe bet, no matter what some of your peers may lead you to believe. With interest rates at near-record lows, commercial real estate investment today represents one of the safest – and most profitable – investments you can make.
Commercial real estate continues to be a safe harbor for investors looking to store their wealth in a safer asset than the stock market. It isn’t just the sense of peace and security that comes with having a tangible asset (or assets) made of brick and mortar. Executed properly, commercial real estate investment can also be one of the most profitable forms of investment. Other forms of investment – such as stock portfolios, exchange-traded funds (ETFs) or investment CDs – are either more volatile or less profitable.
Investing in Commercial Real Estate
At 1031 Equity Exchange, LLC, our Commercial Real Estate Brokerage Services are focused primarily on 1031 Exchange transactions. We utilize Internet-based technologies to provide a central meeting point for investors, brokers and principals to facilitate their 1031 Equity Exchanges.
By allowing our investment associates and partners to list their properties on our network, we are able to provide our members with a valuable list of potential exchange assets that is accessible at all times from anywhere in the world.
1031 Exchange transactions have tremendous tax benefits, but the strict regulations and deadlines involved with these exchanges necessitate careful planning and precise strategy. Our process is simple and straightforward. Once you are a member of our Exchange Network, we guide you through every step of the process and constantly notify you of great Real Estate Investment opportunities that match your criteria as soon as they become available to us.
With more than 25 years of experience in negotiating Commercial Real Estate transactions, we know exactly what it takes to find and negotiate the right property for you.
Because of the tax benefits of multiple 1031 Exchanges, a single, well-placed investment in Commercial Real Estate can lead to a lifetime of wealth and security for you and your family. By continuing to exchange your properties for larger, more profitable properties, you can enhance your investment portfolio without being subjected to crippling capital gains taxes.
Commercial Real Estate versus Alternative Investments
At 1031 Equity Exchange, LLC, we believe that investing in commercial real estate is the best way to build a lifetime of wealth and security. However, there are a number of alternative investments that you can consider. The following is a brief overview of some of the more popular alternatives.
Mutual Funds, Stocks and IRAs
Mutual funds, stocks and IRAs are among the most common forms of investment. Unfortunately, they also carry more risk than other investments. If you are trying to build wealth not just for yourself but also for future generations, gambling on the stock market is an extremely risky proposition.
Although a succession of hot stocks can lead to huge gains, a dry spell can leave your retirement portfolio in shambles.
If you are young and not averse to risk, there is some merit to taking risks in the stock market. After all, you have years to make up for any losses. For most investors, however, the security and consistent profits offered by investing in commercial real estate is a much safer bet. The stock market is volatile (particularly in the current economic climate). Your investment portfolio should be built on tangible assets.
A number of investors and financial experts point to bonds as a safe, risk-free investment. Yet a corporate bond is nothing more than a piece of paper promising that the corporation will pay back the bond plus interest. Its value is entirely tied to the future success of the corporation that issued the bond. While large corporations with minimal risk of defaulting issue most bonds, the bankruptcies of companies like Enron and Delta Airlines should serve as a cautionary tale.
Even worse, the interest rate on bonds can be as low as 2 percent. Not exactly the financial bulwark you were expecting, right? Investors who focus on buying bonds and other low-risk, low-return investments often struggle to build lasting wealth. Rather than purchase a bond with low interest rates and more risk than most people realize, why not invest in commercial real estate? In addition to the value of the property, you can rent it out for profit or use it in business.
At 1031 Equity Exchange, LLC, we specialize in helping our clients build their wealth through safe, profitable investments in commercial real estate. To become a member, please contact us or join our network today.