Here’s How to Start Investing in Commercial Real Estate

Key Takeaways

• Commercial real estate was hit particularly hard by the pandemic
• Wall Street REITs still manage about $4.5 trillion in assets in the United States
• REITs are a way to start investing in commercial real estate

Many experts have been bemoaning the downfall of the commercial real estate market since it became apparent that hybrid work models were here to stay. But offices aren’t the only type of commercial real estate there is, and some optimistic developers are keen on changing offices to living or mixed-use spaces.

If you’re interested in sticking around for the long transformation, now is an interesting time to get started in commercial real estate. We’ll talk about how below.

If you do decide to get into the commercial real estate game in this moment of uncertainty, you can balance out some of that risk with the Q.ai Inflation Protection Kit. Inflation Protection defends against this scare factor, providing you with a smart response to the possible devaluation of cash.

Download Q.ai today for access to AI-powered investment strategies.

Is anyone investing in commercial real estate these days?

Commercial real estate took a really, really big hit during the pandemic, but things might turn around from an investment perspective.

Cohen & Steers, Goldman Sachs, and EQT Exeter are a few of the big names raising money for funds to focus on real estate with values that have significantly declined. “The last few weeks, I’ve been saying, ‘holy mackerel, they’re coming out of the woodwork,’” Kevin Gannon, chief executive of Robert A. Stanger & Co., an investment-banking firm that tracks real-estate fundraising, told the Wall Street Journal.

Housing demand is outpacing supply, and plenty of now-empty office spaces are getting converted into apartments. Still, though, more than one billion square feet of office space is sitting empty throughout the United States.

Surely someone will do something with all that space? That’s the bet some investors are making.

How can you start investing in commercial real estate?

You can invest in a variety of types of commercial real estate — not just office buildings. Self-storage, for example, has outperformed other commercial real estate sectors for years. Parking lots, mobile home parks, senior living facilities, and undeveloped land are all viable options for investment, as well.

If you’re just starting out, real estate investment trusts, or REITs, are a great way to dabble. You don’t have to deal with any hands-on effort in managing a property yourself. REITs are companies that own income-producing real estate (like the ones mentioned above, in addition to malls, hotels, warehouses, apartments, and more).

At their best, REITs pay large, steady dividends. They do, however, carry some risk like any other investment. Through a brokerage account, you can buy and sell publicly traded REITs just like a stock. If you don’t want to trade individual REITs, you can go in on an ETF or mutual fund that vets and invests multiple REITs for you.

The bottom line

REITs are a great way to diversify your portfolio and have historically performed well.

Given how much the commercial real estate landscape has changed in the wake of the pandemic, we recommend further balance and diversification with the Q.aiInflation Protection Kit. This kit invests in assets like ETFs, TIPS, precious metals, and commodities to hedge against inflation risks.

Download Q.ai today for access to AI-powered investment strategies.