While equity and fixed income markets typically move in tandem with economic cycles, income from real estate assets benefits from multi-year leasing contracts. As a result, properties can generate steady and predictable revenue streams apart from the relative growth of the general economy. Experienced real estate investors assess the creditworthiness and predictability of a property’s income stream and adjust their pricing, return requirements, capital structure, and underwriting criteria accordingly.
Given its positive correlation with changes in the consumer prices, real estate investment can provide a partial hedge against inflation. As consumer prices rise, so also should real estate cash flows and, typically, associated property values. Moreover, many commercial lease contracts are inflation-indexed, providing property owners with an additional layer of inflation protection.
The positive spread between core real estate yields and the benchmark 10 year U.S. Treasury is currently between 300 to 400 basis points. This spread offers investors an attractive risk “cushion” as well as more promising returns on both a current and total return basis.
Market inefficiencies yield an abundance of value enhancement opportunities for private investors and their investment advisors with the information, discipline, and expertise to identify and capitalize on them.
Interest rates are currently near 40 year lows, and other alternative investment products currently offer historically low returns to investors. Within the real estate marketplace, however, debt capital remains available and well priced for sophisticated real estate market participants.
Real estate returns have been negative only 5.0% of the time from 1934 to 2002, compared with 25.0% of the time for U.S. stocks and bonds during the same period.
Direct ownership of real estate has the potential not only to reduce overall portfolio risk but also to contribute to improved portfolio performance with respect to risk. Portfolio managers use a tool called the Sharpe Ratio to measure the level of excess return an investment will yield for each additional unit of risk assumed. The Sharpe Ratios for multiple investment categories illustrate that direct real estate investments can generate returns that are comparable to those of stocks but with far less risk.
Investors play a crucial role in the success and growth of businesses.
Investments provide a solid foundation for cooperation.
Investment in buildings is a profitable opportunity for long-term profitability.
Close to downtown, this charming Colonial style office building is fully utilizing its 22,000 SF of space. 100% rented in a 5% vacancy suburban market, the diversified tenant roster presents minimal investment risk.
Located between exits 7 and 8 off 287, in a busy and growing market, 7 miles from Rutgers University offering quality office space from every day use to education with amenities including a fully stocked café. With diligent effort and market analysis, this 100,000 SF office property recovered from 75% vacant shortly after the 2008 economic crisis to its current status of 93% leased in a 8% vacancy sub market.
An elegantly appointed pre-school serves the surrounding community of highly educated professionals, NYC commuters and local entrepreneurs. The educational facility of 21,000 SF, a single tenant triple net is a 100% occupied long term rental in a 5% market. The development of a 6,000 SF pad site is under consideration.
This property consists of two office buildings. The buildings have a total of 88,000 SF. The property was purchased with 98% occupancy. 70% of the property is occupied by the previous building owner who signed a fresh ten-year lease upon closing. The stable tenancy and the growth potential in the remaining space make this property an attractive investment for those seeking safety and stability.
15 Kings Grant Drive is a 56,641 SF, 3-story, class-A officebuilding built in 1957 and upgraded in 2011, on 3.0 acres with 150 parkingspaces. In a corporate park setting within 15 minutes of downtown Philadelphia,it offers a lower-taxes for businesses while being 21 minutes to PhiladelphiaAirport and offering a walkable neighborhood within close distance to shopping,restaurants and a hotel.
225 City Ave is a 78,590 SF, 3-story, class-B+ officebuilding built in 1955 and substantially improved in 2008, on 3.41 acres with189 parking spaces. 225 City Avenue hasan exceptional opportunity to absorb both the businesses seeking to leavePhiladelphia (still staying close to downtown) but mostly from the displacedBala Cynwyd office tenants who are quickly becoming displaced victims of BalaCynwyd’s rapidly changing real estate market (razed offices replaced bymulti-residential units). Bala Cynwyd recently changed its zoning to allow forreplacing offices with high-end retail and multi-story residential making thisa prime location for any such developers. 225 City Avenue also has “excessland” that will add to the attraction for a future high rise developmentopportunity.
Located directly at exit 6 of Interstate 287, this easily recognizable office building was purchased with a 56% tenancy in an 8% vacancy market. The ability to purchase the property for the economic value presented by its tenancy made this a simple decision. Our confidence in the ability to fill the building with new tenants and improve the property made this attractive investment a great value-add deal for our partners.
Norden’s acquired this 132,000 SF flex and warehouse building in the nearby King of Prussia, and Philadelphia, PA area in late 2016. This clean flex space building offers generous educational, administration, warehouse and distribution capacity. five tenants, representing an 80% occupancy rate and a 7% vacancy. The Philadelphia area has been growing driving the area vacancy rates for these types of properties from 20% to 8%.
Located directly at exit 6 of Interstate 287, this easily recognizable office building was purchased with a 56% tenancy in an 8% vacancy market. The ability to purchase the property for the economic value presented by its tenancy made this a simple decision. Our confidence in the ability to fill the building with new tenants and improve the property made this attractive investment a great value-add deal for our partners.
Leave a message below and we will contact you shortly!