RICHMOND COLLINSWORTH – Money is flowing all around us, like oil gushing out the top of Spindletop, one of the most famous wells of the Texas oil boom. Now is a good time to start investments in Dallas Commercial Real Estate.
The economy has recovered nicely, with the DOW up to $26,313,89 from $6,547.05, the unemployment rate down 3.5% in Dallas, Texas, and 30-year interest rates of 3.375%.
However, have we already forgotten the 2008 Great Recession, and the lessons learned? With all the money made over the last few years, it’s easy to forget about the money lost during the economic recession. We can easily repeat the same mistakes that got many of us into trouble.
In the 2008 Recession, many investors did not understand the complex financial products they purchased. They found out that many of the “safer” products they purchased ended up being some of the most toxic investments. Because of the bond credit rating, agencies allowed “C” rated investments to be pooled together. These investments were then sliced, diced, and repackaged. The “C” rated investments emerge with a portion of that pool to come back out with an “A” rating.
Now once again eager for a return on their money, investors are chasing yield and buying financial products. Investors do not understand the underlying asset or derivatives of the pooled assets in which they have invested.
Do you know what comprises that emerging debt fund or that high yield fund you invested in?
Get active about managing your money and know what it is you are buying. As a real estate professional, I am biased about real estate investing. However, I know that when the real estate market goes South, as all markets do, I can make changes as needed to weather the storm. I compare this to having no control with a foreign government defaulting on their bonds I unknowingly invested in as part of a “diversified portfolio”.
I recommend buying properties in an area that you are familiar with. Ask brokers about the market area and their market expertise about potential investments. Ensure you choose an area where there is a demand for an investment product, and there is not an over-supply of properties available for lease
In the Dallas Market, there is a variety of product types to choose from. Ranging from residential and office, to industrial or retail. Some investment properties are for lease with existing tenants, while other properties are vacant. The range of returns verifies upon lease term, tenant credit, property type, age of the asset, building condition, and location.
In conclusion, search for investment opportunities, both acquisitions, or developments. Choose a team of brokers that are performance-driven, and use a singular investment philosophy, to help you create wealth with commercial real estate investments.
Richmond Collinsworth is a First Vice President for Bradford Companies and specializes in Office Project Leasing and Office Investments.
This article has been updated, original article here.