There will be distressed asset opportunities in commercial real estate. Now is the time to get smart. But before we do, let’s rewind and review how smart we’ve already gotten so far.
On March 16, 2020, as someone interested in buying a home, you read How Does Real Estate Perform When Stocks Melt Down. From this article, you learned that real estate tends to significantly outperform when the S&P 500 is down between 10% – 20%. If you bought residential real estate in 2Q2020, you’re likely doing well as demand for residential real estate continues to grow.
On March 18, 2020, you read How To Predict A Stock Market Bottom Like Nostradamus and decided not to freak out. Instead of selling stocks, maybe you even bought stocks. If you did, you’re sitting pretty given the NASDAQ and the S&P 500 rebounded to all-time highs.
If you’re still looking to build more wealth, your attention should now be focused on investing in lagging asset classes. In particular, I’m interested in investing in distressed assets in commercial real estate.
According to Real Capital Analytics, commercial real estate valuations fell by 35% between August 2008 and June 2010. Despite the bull market in stocks and residential real estate so far, history could repeat itself. Therefore, we should be preparing now.
To help us get smarter about distressed asset opportunities, I’ve asked CrowdStreet, a site sponsor and one of the top real estate crowdfunding platforms to answer some questions.
CrowdStreet is focused on finding promising real estate investments in 18-hour cities where valuations are lower, rental yields are higher, and potential growth is stronger due to demographic shifts to smaller cities. The site is free to sign up and explore.