Isnt commercial real estate a rather volatile asset from a valuation and occupancy perspective?
In order to avoid these problems, our team carefully select projects in the most promising locations with stable demand. We define best use objects in order to reduce the vacancy of areas and offer market what it needs. And we are working with potential tenantries to fill the vacant space in a timely manner.
What type of metrics are you reviewing to ensure stability? Do you believe commercial real estate has been on the rise or decline over the last decade? Why would your properties remain occupied in down economic times?
Commercial real estate prices and yields highly correlate with overall economic activity of the region of its location. So if we invested 5 years ago in commercial RE with global diversification we might get really good returns as global economy was in up trend and actually recovering from 2008 crises. Drilling a little bit dipper makes your question much more complicated. For example shopping molls in USA are suffering not their best times and there are a lot of vacancies, but same shopping molls in most EM are still in their uptrend as market still operates below its capacity.
Summing up commercial RE as a class of investment is profitable, but there were losers and winners. We believe that expertise of our team will provide our investors with fantastic opportunities.