3 Ways to Find Solid Investment Ground With Real Estate

As the economy starts to reopen and readjust, and vaccine distribution finds its stride, uncertainty continues to swirl around financial markets. With urban offices, hotels and retail still in a months-long slump, investing in real estate, particularly commercial properties that rely on people freely coming and going, seems questionable.

And yet, according to a recent survey, that’s exactly where investors are interested in putting their money.

According to CrowdStreet’s 2021 Investor Sentiment Survey, 96% of investors polled plan to add commercial real estate to their portfolios this year—beating out both stocks and bonds—and 59% plan to invest more in commercial real estate this year than they did last year.

Real estate is poised to hit a new cycle of growth, according to Ian Formigle, Chief Investment Officer of CrowdStreet, an online investing marketplace launched in 2014 that has attracted nearly $1.7 billion in investments. CrowdStreet allows its community of investors—now more than 80,000—the opportunity to research, compare, and invest in a wide variety of real estate assets with individual deals, private funds, and tailored portfolios.

“Some experts are predicting a nearly 40% increase in total U.S. commercial real estate transactions for 2021,” says Formigle. Certain asset classes like retail and hospitality will take longer to recover, he says, but warehouses and multifamily buildings in many locations are in high demand.

For investors considering adding real estate to their portfolio in 2021, here are some things CrowdStreet suggests should be top of mind:.

1. Follow the migration. According to Pew Research Center, one in five American adults has moved or knows someone who’s moved because of Covid. When considering metro areas for real estate investment, think about factors such as population growth, job growth, rental growth and unemployment rates, as well as less tangible aspects, like quality of life. According to CrowdStreet’s report, “The Best Places to Invest in 2021,” the top five overall markets are Raleigh-Durham, Austin, Texas, Phoenix, Salt Lake City, and Dallas-Fort Worth.

2. Think industrial. There’s been an e-commerce awakening and acceleration in the U.S. as Americans flock online to purchase groceries, electronics, appliances, and just about anything else they can get their hands on. That convenience is here to stay, and it has increased demand for warehouse spaces. In 2020, for the first time, investors funded industrial real estate projects more than office buildings, and it looks like that trend will continue. To find promising industrial opportunities for your portfolio, consider areas close to large, diverse populations, with easy access to highways, railways and ports.

3. Explore multiple multifamily opportunities. As priorities—and home addresses—shift, there’s an increased opportunity for investing in the development of multifamily units. The suburbs have seen vacancy rates decline nearly 10% over the last 12 months to 5.5%, according to the real estate insights site iProperty management. A slowdown in multifamily development into 2022, particularly urban development, could further constrain the supply. The overall outlook for multifamily is positive, however, with favorable target tenant demographics, all-time low interest rates, and a spike in single family values pricing out would-be buyers. Look for development opportunities in areas that will support an increase in density. Wherever people live and work, investment opportunity often follows.

Beneath the uncertainty that lies ahead, there’s ample opportunity. Today, investing in real estate means something vastly different than in the past, and one no longer needs to be ultra-wealthy or a full-time landlord to access real estate investing opportunities. With online platforms such as CrowdStreet, anyone can invest in properties that meet their criteria—from the comfort of their couch—while diversifying their portfolio.

“In the past, commercial real estate investment was often limited to larger firms and wealthier individuals, and, typically, in proximity to where those individuals and firms were located,” says Formigle. “Online real estate investing sites such as ours have made this asset class more accessible, and more people are realizing that commercial real estate can be a solid, long-term investment. This is particularly true as we enter a new real estate investment cycle.”

To learn more about real estate investing opportunities, visit CrowdStreet.com

^{CrowdStreet, Inc. (“CrowdStreet”) maintains a commercial real estate investor technology platform through which companies that develop and own commercial real estate can offer investment opportunities to qualified, accredited investors (the “Marketplace”). CrowdStreet is not a registered broker-dealer or investment adviser. CrowdStreet does not endorse any of the investments on the Marketplace or provide investment recommendations or advice. Additionally, investment opportunities posted on the Marketplace are “private placements” of securities that are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Neither the SEC nor any state securities commission or regulatory authority has approved, passed upon or endorsed the merits of any offering on the Marketplace.}

^{This article is for informational purposes only and is not, and nothing in it should be construed as, an offer, invitation or recommendation with respect to any securities issued by CrowdStreet or its affiliates, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, any securities in any jurisdiction. Neither this article nor anything in it shall form the basis of any contract or commitment. Investing in commercial real estate entails risk. Direct and indirect purchase of real property, including through those investment opportunities posted on the Marketplace, involves significant risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital. This article is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate.}