Tag Archive for: real estate investment

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A key component of a successful real estate investment is choosing the right asset class to invest in within the given market.

Supply and demand is constantly changing, meaning what was a lucrative investment one, two, or 10 years ago may not be worthwhile today. See what types of real estate are in high demand right now and how investors can participate in the growing market.

Before we dive into where opportunity lies, note that just because there’s a general demand for these types of real estate doesn’t mean there’s opportunity for them in everyĀ market. Real estate is a very localized business that operates on a macro and micro level. For activeĀ investors, it’s important to identify what opportunities lie in your local market or participate in a more diversified investment portfolio specializing in these asset classes through aĀ real estate investment trustĀ (REIT).

1. Cold Storage

Cold storageĀ is a type of industrial real estate responsible for the storage and transportation of cold goods, including food products. The global pandemic interrupted the food supply chain, making consumers and large grocery retailers adapt to the shift in consumer preferences for online grocery sales as well as the need for more cold storage as a whole.

This specialized niche has several barriers for entry, making it a difficult asset class to invest in outside ofĀ Americold Realty TrustĀ (NYSE: COLD). Americold is the onlyĀ industrial REITĀ specializing in cold storage, owning more than 1 billion cubic feet of cold storage space. The company is well positioned financially to grow with the increased demand.

2. Data Centers

We are undoubtedly in the age of technology, with more people and products becoming reliant on the efficiency, ease, and convenience of technology. Data centers are responsible for safely storing and computing data for the government, large corporations, cloud companies, and even data used from phones.

Demand for data centers has been on the rise over the past decade, but COVID-19-related work-from-home orders have put even more pressure on this growing sector. While demand as a whole is up, certain markets are leading the sector, including northern Virginia and Atlanta.

Data centers are another unique sector to invest in with large barriers for entry, making any of the topĀ data center REITsĀ a wonderful way to participate in this industry.

3. Residential Housing, With Emphasis On Affordable Housing

A study conducted by Freddie Mac found that the U.S. is short 2.5 million to 3.3 million housing units in 29 states, with states like Oregon, California, Texas, Minnesota, Florida, and Colorado the leaders in the housing shortage. These states, among others, are also home to some top-tier markets, where housing prices far outpace wages for the area, puttingĀ affordable housingĀ in serious demand.

This means multifamily properties, single-family homes, andĀ new constructionĀ can potentially be good investments in theĀ right markets. This asset class is the easiest point of entry for investors, with dozens of options available to participate in actively, likeĀ fix-and-flipĀ orĀ rental properties, or passively throughĀ residential REITs.

However, it’s important to note that with currentĀ eviction moratoriums and a record number of tenants being unable to pay rent, the rental industry is facing tough times, making this a volatile market to participate in right now as a smaller investor. However, this industry is fairly resilient, and while it’s currently facing unique challenges, this market clearly has long-term demand and should bounce back in time.


Source: The Motley Fool

The real estate market is one of the most in-tune economic barometers; its transactions add up to nearlyĀ 15 percent of GPD.

As globalization and digitization continue to disrupt established labor and business patterns, housing needs and investment opportunities evolve as well. In certain go-to metro areas like Silicon Valley or Dallas Fort Worth, the workforce struggles with a housing impasse. Historic luxury property magnets like New York or Los Angeles are seeing a heated bidding war between domestic andĀ international buyers, competing for investment.

While regional hubs benefit from available housing to attract talent, there isĀ a growing body of evidenceĀ to suggest a direct correlation between rising housing costs and stagnating job rates. Thatā€™s a worrisome prospect. In better news, millennials are finally beginning to transition from renting to buying,rejuvenating upscale home sales. But that still raises a few questions, like is 2018 gearing up to be a good year to invest in real estate? If so, where should one look? What incongruities should buyers watch out for?

To navigate a market fraught with mixed messages, the Observer turned toĀ Justin Fichelson, luxury real estate advisor and TV personality on Bravoā€™sĀ Million Dollar Listing San Francisco, whoā€™s built a thriving business on referrals and exclusive repeat clients.

With markets rallying and prices rising, is it a good time to buy?

Absolutely! The real estate markets in the major urban centers in the United States have increased dramatically; $300K in the mid-1980s in San Francisco could get you a house thatā€™s worth over $5 million today. Long-term, real estate will only go up if you buy wisely in resilient markets connected to innovation-driven industries. For example, the West Village in NYC saw townhouse values soar 150 times, within one generation. If you think ahead, strategic real estate purchasing is key to peace of mind for you and your family. If we map the economy dynamics now, Austin, Texas continues to grow as does Charlotte, North Carolina and many towns around the Bay Area including Vallejo, Walnut Creek and Petaluma.

How will price hikes affect real estate markets in 2018?

The phenomenon of being priced out of a neighborhood is real, both for older longtime residents and people starting their professional lives in a new place. Look for areas where young people are moving next. For example, San Francisco with its strict zoning laws has a highly coveted and extremely limited stock. As a result, people are moving to outlying areas within strong transportation networks which are being developed to accommodate such expansion. Places like Vallejo and Richmond are attractive for those looking to flip a property. Of course, there are always safe bets in historic neighborhoods like Pacific Heights or SoHo.

Is there a difference between clients based in New York versus San Francisco?

Bay Area clients are mostly in tech-related industries, while NYC customers come from a far more diverse array of industries like finance, entertainment and fashion; they often originate from abroad, which makes sense. The American market is one of the most resilient due to being supported by perhaps the most diverse economy in the world. People are still looking to live the American dream! NYC clients also tend to have a more sophisticated eye, when it comes to the architecture and design of high-end new development projects.

So, what does a million dollars buy in the USA?

That depends on where youā€™re looking to explore. A million in San Francisco is a good one-bedroom or a mediocre two-bedroom apartment. In NYC, that may be a one-bedroom in more accessible areas or a shoebox in the hot spots. In Miami, thatā€™s a spacious two-bedroom or a decent home away from the beach. In LA, a million-dollar property can range from a small single-family home to a tiny plot of dirt in a commercially lucrative area. In most urban places, the pricing varies dramatically, depending on the neighborhood.

What questions should prospective buyers ask themselves?

What are you trying to achieve with this purchase? Is it a family home or something convenient for a couple years with the goal of getting a larger space later? Realistically, how much are you comfortable spending and how will that alter your lifestyle? Then, think about who you are going to work with to accomplish this. For example, a home in the trendy Cow Hollow area of San Francisco sold for a million over its asking price the dayĀ beforeĀ it was to be brought on the marketā€¦the West Coast is gaining popularity as an international home-buying destination, so buyer competition is real. Itā€™s all about knowing the right local experts and building a relationship with an agent you trust.

If you were to retire now, where wouldĀ youĀ live and what would you do?

Iā€™d split my time between San Francisco, NYC and London. Iā€™m a San Francisco native, NYC is the center of the world, full stop, meanwhile, London has the perfect combination of urban beauty, world history and the geographic convenience of getting anywhere in Europe within a few hours. Iā€™d probably increase my involvement with charitable causes. I am a founding member of the Exploratorium Lab which raises money for the Exploratorium, one of the worldā€™s premierĀ interactive science museums. I believe that education, ultimately, is the key to success in any undertakingā€”including buying a home.


Source: Observer