Investing in CRE

How To Hedge Against Inflation By Investing In Commercial Real Estate

Towards your inflation protection strategy, there are three ways in which you can get started on investing in commercial real estate:

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate. Because REITs are formed as corporate entities, investors are able to purchase shares in them, providing access to the rental income and profits produced by the underlying assets. REITs can be publicly traded, which allows investors to buy and sell shares like stocks or mutual funds, providing a high degree of liquidity. Alternatively, they can be private, which provides less liquidity, higher management fees, and a longer-term commitment.

You can opt to own or co-own a commercial real estate directly. Here though, you will need to have an in-depth knowledge of the market you are choosing to invest in and also take care of all the formalities, legalities, and operational charges of the property. This is a better option for those who have known a market for long, have ample funds to invest, and are not looking for a quick, convenient exit route.

Private Equity Real Estate firms and REITs have a similar mandate—to pool investor money and deploy it into real estate assets in order to produce passive income. However, the securities offered by Private Equity Real Estate firms are not publicly traded and are only available to accredited investors.

• REITs
• Directly
• Private Equity

No matter the preferred option, an investor can gain exposure to commercial real assets and enjoy the inflation protection that tends to come along with them.