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CRE Favorable Hedge Amidst Stock Market Volatility
Marcus & Millichap’s CEO Hessam Nadji says real estate stands out favorably amid the recent stock market volatility. He recently appeared on CNBC to talk about interest rates and tax reform. His reasons commercial real estate stands out as an investment choice include:
“The market is reflective of great fundamentals,” Nadji says, pointing out, there’s good job growth, the market is not overbuilt, it offers compelling yields and, perhaps most important, real estate is not overleveraged. He says it is “not 2007 by a long shot.”
On top of those positive aspects, CRE is experiencing new capital flows from private investors, who are just entering the market for the first time.
Yield is another reason real estate stands out as an investment option, notes Nadji. That’s because there’s a good balance between risk, reward, demand, as well as a variety of asset classes to consider. Nadji points out there’s emerging sub-sectors like self storage in which to invest, and CRE now presents a compelling option beyond just office assets.
Lastly, he points out real estate investors may just be wrapping up their 2017 tax filings, so the implications from the 2018 tax reform have not yet played out. Nadji says tax reform is good for CRE, but the full effect of the tax-friendly laws won’t become apparent to investors until later. He says it will take a “cycle or two” before the marketplace really focuses on the benefits.
For comments, questions or concerns, please contact Dennis Kaiser
- ◦Economy
- ◦Sale/Acquisition
