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So many fortunes have
been made in the realm of commercial real estate development finance
that it has become almost a proverb. The potential yields outpace
the expected average returns of the public equities markets by such a
pace that specialized funds have been created to advance the funds
needed to fuel the beast. The most recent bubble in the market is
owing to housing speculation, but the commercial real estate market
continues to drive earnings day in and day out. Why
does the business work this way? What factors are involved and how
can these factors impact a given investment in commercial real
estate? How can the risks and rewards generated by commercial real
estate development projects be channeled to investors who are not
Qualified Institutional Buyers? An
understanding of market capitalism creates the knowledge base that you
can use to create an outstanding retirement income for you, your family
and perhaps generations to come. The recent sub-prime fiasco is
the result of risks being taken that were not legitimate. The
reason institutions were making these investments is that the
institutional market perceived this as a higher-yielding loan
opportunity that just would not quit. But as with all things
involving market capitalism, the more funds that were poured into the
housing market, the more it tends to drive down the profits (Adam Smith
made this observation in his book that was published approximately four
months before our Declaration of Independence was signed). There
are no real mysteries here, just abject lessons we can use to our own
advantage. The key
factors involving an investment in commercial real estate development
programs are:
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The project phase
being financed.
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The leverage the
financing enjoys.
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The holding period
required to get the return the sponsor states as being potentially
possible to acquire.
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The risks and rewards
regarding the disposal of the holdings on demand.
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The experience of the
sponsor or developer (as the case may be).
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The structure of the
transaction financing layers.
You too can participate
in institutional quality asset investments without paying the huge
middle-man fees on an ongoing basis. Your investment banker should
have some pending issues and/or your real estate broker. If they
don't, then contact Rainmaker Marketing Corporation and see what the
future might in fact look like. You put yourself in the middle and
be in control of your future is the only way to go. |
