Family Office Real Estate Blog

The destructive wave that swept across the US economy in 2008 seemed to catch the world completely by surprise. The phrase so often used to describe it, a “financial tsunami,” reinforces the popular belief that the disaster arose suddenly. In reality the build up to the Great Recession could be clearly tracked and its timing predicted with a stunning degree of accuracy long before the phrase “collateralized debt obligation” entered the popular lexicon. The real cause of the crisis is far older, far more interesting, and far more profitable to understand for those interested in what lies ahead. As early as 1876, Henry George observed the curious cycle through which real estate markets inexorably move. His findings can be summarized (with the help of Glenn R. Mueller’s refinements) as follows. Phase I: Recovery We know the characteristics of a recession: high unemployment; decreased consumption; and decreased company investment in buildings, factories, and machines. The pr...

The first goal in buying commercial investment property is to pay the amount necessary to earn predictable returns, despite unpredictable events. The first step to achieving success for value investors in private-equity commercial real estate is buying an investment property at the right price. Whether the investment is a multi-family apartment building, an office building or an industrial facility, the true worth of the asset isn't the income stream. Price appreciation is what builds wealth. So how does one achieve price appreciation? For real estate investors, it starts by understanding the difference between price and value. Price is what one pays, while value is what one receives. Buying investment property at too high a price isn't a good value. Instead, it is the surest way to limit potential returns. But commercial real estate can double or triple in value for an investor who can spot hidden growth potential, develop a strategy to unlock that untapped value an...

This type of strategy ensures that assets will be available when investors need them. The markets have see-sawed hundreds of points over the past few days as Americans voted and the aftermath became clear. Stock markets have historically been susceptible to significant events, and the Donald Trump upset win in the presidential election certainly qualifies as that.  What is an investor to do? Bonds aren't the answer. Increasingly, they move in the  same direction  as stocks during market ups and downs. That makes them less attractive than in the past as a hedge on market risk. A byproduct of this trend: Investors are taking a closer look at  private-equity real estate  and other alternative investments. Shielded from daily market swings, these assets  strengthen portfolios  with their high returns and low volatility. In addition, there is a bigger change in investment strategy that plays to the strength of private-equity real estate. It is ...

For the  family-run firms  in the real estate industry , a crucial concern centers around ensuring the longevity of the business they’ve spent years building and the assets they may have accrued. It usually means  the process  of prepping children to take over the business itself, as well as any assets in the firm’s portfolio.  NREI  consulted with attorneys specializing in succession planning for tips that family-run real estate businesses may want to keep in mind. About succession planning Among the chief goals of succession planning is providing continuity of management, in addition to minimizing the tax costs of transferring property interests to new generations, according to Bruce W. Tigani, attorney and chair of the tax, estates and business practice group at Morris James, a law firm based in Wilmington, Del. “Succession planning ensures the business has the capability of continuing profitability in case something happens to the owner or i...