Equity Market Volatility Sends Investors to Commercial Real Estate

Posted on March 07, 2019

The wild ride of the equity markets during the second half of 2018 has many investors asking if the economy’s extended period of expansion is coming to an end. In response, many investors are pulling their money out of the public markets and putting it into the relative safety of commercial real estate. Following are four reasons why commercial real estate may be a better investment option, especially in the current environment:

Control over Specific Investments. Unlike investments in mutual funds, you can control which properties you actually buy and you have the ability to make improvements to a property in order to increase rental income and investment returns.

Control over Cash Flow. When the equity markets decline, you immediately loose the value of your investment and any profits on which you may be relying. Conversely, real estate investors who experience a down market will continue to have a steady flow of rental income from property tenants.

Minimize Tax Liabilities. Investments in commercial real estate provide individuals with a number of tax advantages, from depreciation deductions to deferred capital gains a property is sold through a 1031 exchanges. On the contrary, investors will have to pay capital gains tax on the sale of any stock or mutual fund that has appreciated in value.

Built-In Appreciation. Investments in a tangible asset such as real estate provides added appreciation benefits that individuals will not find in stock market investments.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email info@orionmiami.com