Real Estate Investment, especially in the private equity world, needs to have strict rules and guidelines. I wanted to share with you what I like to call the “Seven Commercial Real Estate” Commandments:
Commercial real estate is a local business
There is no substitute for local market knowledge. I’m not calling the company in New York to ask about a property in LA. Local operators will outperform investors who do not intimately understand the market.
Middle market deals are too large for poorly capitalized local operators–and too small for large institution personnel–to manage effectively. Superior, risk-adjusted returns are found in the middle market.
Access to capital is imperative to success
Commercial real estate assets need constant funds for building expenditures and new leasing expenses. Institutions with personnel who have access to new debt and equity will outperform smaller operators who are without the same access to capital.
Self-management is vital to success
Ownership can be the greatest performance incentive. We believe the most effective manager of an asset is its owner. This applies to leasing, property management, and asset management.
If you have any questions regarding investment in commercial real estate, please reach out to the team at First National Realty Partners. The asset types that we have available to our individual investors are a very attractive alternative to the stock market or real estate crowdfunding platforms. We have commercial property types in various vehicles that are strategically purchased to be stable and provide significant upside potential.
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