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A To Z of Passive Commercial Real Estate Investing

A To Z of Passive Commercial Real Estate Investing

Passive commercial real estate investing is one of the best wealth-building opportunities for investors today. Not only is real estate an asset, but you can also purchase a real estate property. Suppose you want to diversify your existing portfolio. In that case, it is wise to understand how to invest in commercial real estate passively.

First thing’s first

Before investing in commercial real estate, it is essential to understand how it works. CRE or commercial real estate refers to properties that are primarily used only for business purposes. Commercial real estate is owner occupied, which means the owner operates his business at the property’s location, or the property might be leased to tenants.

Commercial real estate classes

In many cities, commercial properties have their zoning codes. The code is meant to keep various types of properties clustered together. Here are the primary classifications of CRE that are characterized as Class A, B, and C.

Class A

These are the highest quality properties in the area and are not older than 10 to 15 years. They are occupied by tenants of high-credit with low vacancy rates. They are located in a suitable marketplace managed by a property manager along with an asset manager.

Class B

These are a step below Class A, which are older, about 20 years or less. They feature a reliable amenity package with both low and high-credit tenants.

They are an ideal place to invest in with a little higher vacancy rates than Class A properties.

Class C

Class C properties are older than 20 years and more. They lack amenities and are usually occupied by low-credit tenants with the highest vacancy rate. They are not located in the right area in the market with the lowest rental rates.

Commercial real estate properties to invest in

Multifamily

Multifamily properties are a viable option for investors. They can be either duplex or mid-rise, high-rise apartment buildings.

Office

Office real estate investing requires more capital than any other type of CRE. They can offer investors some of the highest values due to the cost of turnover.

Industrial

They are widely available in different sizes and uses. They include bulk warehouse, heavy manufacturing, light assembly, showrooms, storage units, and whatnot.
Retail.

One or more retail anchors occupy retail centers. They include retail out-parcels, power centers, regional malls, and more.

Hospitality

This real estate property is meant to serve travelers, whether they are leisure or business. They include drop-in motels, larger resorts.


Disclaimer

This Property Summary has been prepared solely for, and is being delivered on a confidential basis to, persons considering a possible business relationship with the Company (defined in the offering package). This Presentation is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instrument of the Company. No offer of securities shall be made except by means of a private placement memorandum meeting the requirements of the Securities Act of 1933, as amended, and applicable regulations of jurisdiction in which such an offer may be made. Any reproduction of this Property Summary, in whole or in part, or the disclosure of its contents, without the prior written consent of the Company, is prohibited. WealthBCI makes no representations, express or implied, regarding the accuracy or completeness of this information, and the reader accepts all risks in relying on the above information for any purpose whatsoever. Certain information presented or relied upon in this presentation has been obtained from third party sources believed to be reliable, however, we do not guarantee the accuracy, completeness or fairness of the information presented. These materials are not intended to provide, and should not be relied upon for investment, accounting, legal or tax advice. Actual transactions described herein are for illustrative purposes only, are presented as of underwriting and are not indicative of actual performance, and were selected based on objective, non-performance factors such as asset-type, geography or transaction date, among others. Before making an investment decision with respect to any investment, investors are advised to carefully read the related final documentation and offering memorandum documents. No offer of securities shall be made except by means of a private placement memorandum meeting the requirements of the Securities Act of 1933, as amended, and applicable regulations of jurisdiction in which such an offer may be made. Any reproduction of this Property Summary, in whole or in part, or the disclosure of its contents, without the prior written consent of the Company, is prohibited.