As of March 25, 2010, real estate was the third-best performing sector among investment funds this year, despite home sales remaining stubbornly at record lows while unemployment and restrictive lending laws kept serious resurgence in the market at bay. So how did it happen?
Commercial real estate is the answer, says Paul Katzeff, journalist for Investor’s Business Daily. In the past 12 months, he reported, real estate led all sectors of investment funds, rising 91.17 percent.
Katzeff credits the success of real estate investing funds to real estate investment trusts focused on commercial real estate. He believes that the real estate rally is due to a return of liquidity, meaning that while residential credit may still be in quicksand, commercial real estate credit appears to be on the mend.
In fact, in the past 18 months, said Steve Buller, manager f Fidelity Real Estate Investments, REITs (Real Estate Investment Trusts) have raised 20 billion dollars and drawn cash via unsecured bonds, convertibles and banks.
Ultimately, Katzeff believes that since survival is the goal in commercial real estate – presumably unlike in residential, where there are other options available should one’s home no longer be a residential option – survival and thriving are the only options available. If the current property owners cannot make it happen, someone else will.
This is the kind of attitude that is truly vital to the success of any sector of the real estate market. And fortunately, there are plenty of investors out there who are ready to thrive and just looking for the right arena in which to do it. Looks like commercial real estate might represent the answer.
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