(New York)

When people think of real estate investing, their most likely areas of focus is on homes, apartments, or various types of commercial buildings. But Barron’s has run a piece chronicling a very well-performing fund that takes an entirely different approach—investing in property where tenants cannot move, at all. To be clear, this means things like data centers, hydroelectric dams, cellphone towers, and lab space. Large casinos also have this immovable characteristic because of the investment it takes to create them. This type of investing approach has yielded very strong returns over the last few years.

FINSUM: Buying into properties where tenants can’t move creates a very strong defense against economic downturn. This is definitely a good hedge to use against many asset classes and can be achieved using REITs.

(New York)

One of the bright spots in the post-Crisis era has been the collectibles market. Everything from antique cars to high end art has surged in value since the Crisis, making collectibles one of the better returning asset classes. However, at least for the art market, that appears to have changed, as 2016 saw sales shrink 11% to their lowest point since the recession. 2016’s poor performance follows a down year in 2015 as well, when sales slipped 7%. The combined losses have now wiped out all the gains seen in 2013 and 2014. 2016 was particularly poor for auction houses.

FINSUM: Hard to say exactly what slowed the sector down as it had been doing so well. One interesting factor—the declines directly coincide with the bear market in oil.

Source: Bloomberg

(New York)

The real estate investment industry is having a problem. Investors are very eager to put money to work in the asset class, but managers are having trouble finding suitable investments. At the end of 2012, property funds had $136 bn to invest, now that figure is $237 bn. Low rates have driven interest in the sector, but the issue is that there is simply not much for sale, which means investors have a great deal of dry powder yet to be invested. Owners have easy bank financing and low debt levels, which leave them free to hold onto properties until they can get a higher return later.

FINSUM: As this piece rightly points out, a lot of people are investing for yield and not looking at the fundamentals. The market appears to be getting overheated, at least on the commercial end.

Source: Wall Street Journal

Page 2 of 2

Contact Us



Subscribe to our daily newsletter

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…