Low Interest Rates Continue to Drive CRE Investment

Posted on January 09, 2020

The Federal Reserve Bank’s decision to leave interest rates unchanged at the end of 2019, following a quarter-point rate cut in October, has caused many investors to abandon the safety of CDs and Treasury bonds in favor of steady cash flow and the promise of higher returns traditionally found in commercial real estate.

In today’s environment of near-record-low interest rates, even properties whose value has climbed over the past decade of economic expansion represent buying opportunities, especially when considering the tax deferral benefits of 1031 exchanges. Rather than paying taxes on capital gains from the sale of long-held, appreciated property, investors may instead reinvest those gains into a similar property and allow their original investment dollars to continue to grow tax-free.

To be sure, investments in commercial real estate do carry greater risks than bank CDs and money market accounts. However, investors can minimize these risks when they work with experienced real estate advisors who can verify property fundamentals and maintain tenant occupancy through its network of industry relationships.

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.