Every morning when we catch up on the daily news, the story of the economy and the direction it is heading has a different spin. While we love the headlines with a positive slant, every business professional is always planning for the future–no matter what it holds.
We work in the multifamily space and while inflation and interest rates have created a challenging environment for commercial real estate, transactions have and still will continue taking place with great success. Real estate can remain an attractive way for investors to stabilize portfolios in this environment, but with certain extra steps taken to protect investments.
What are those key steps?
- Carefully perform due diligence
Look for red flags and consider how experienced the sponsor might be in their market as well as their track record. Evaluate the deal terms for reasonableness and level of aggression. - Consider the location
Look for areas with growing populations, a strong local economy, and good transport links, as these are all indicators of a thriving community. - Look for potential
Consider factors such as the surrounding area, the project’s existing infrastructure, and the possibility for future development. - Conduct thorough research
Look at market trends, competition in the area, and any regulations that may impact the project. This includes global and macroeconomic headwinds at play. But note this: multifamily real estate will always be a viable component of a diversified investment portfolio because people will always need a place to live, regardless of the economic environment (Source). - Work with a reliable team
Real estate investors surround themselves with a team of trusted professionals, including realtors, lawyers, and accountants, to ensure they make informed decisions. As your commercial architecture partner, we take the opportunity to join you on your investment ventures seriously.
Are you working on a commercial real estate project? Let’s work together.