Investing in commercial real estate involves the purchase or development of properties that are typically used as retail, office, warehouse, and multi-family spaces. There are many reasons why investors want to have real estate holdings as part of their portfolio. Some of these reasons to invest in commercial real estate are as follows:
- Many people want to diversify their portfolio and lower their risk by expanding into commercial real estate holdings
- Cash Flow- You are investing in a structure that has tenants in place which will give you a nice profit and provide income for years to come
- There are Absolute NNN properties that require no management by the owner
- One option when selling commercial real estate is to reinvest in a 1031 Exchange which allows you to defer a portion of the taxes on the sale
- An advantage of commercial real estate is that it can offset the impact of inflation. An owner can adjust rents for inflation, which is quite different from stocks or bonds