Dear Investor,
As high-net-worth investors, your mission should be to construct an investment portfolio that grows wealth and manages risk. One asset class that may be a valuable component in achieving this balance is commercial real estate (CRE). Commercial real estate, and more specifically, multifamily, can be a great part of a portfolio allocation since it has one of the best risk-adjusted return histories of any CRE asset class in a period longer than 3-5 years.
By way of disclosure, we have an advertising relationship with 37th Parallel, meaning we get paid for making this introduction and sharing this content. As always with these types of deals, consider this an introduction and not a recommendation. Every deal is unique and the responsibility to vet any and every deal you invest in still lies with you. This opportunity is available to accredited investors only.
Lower Volatility and Stronger Returns
Studies highlight the return history and low volatility of direct real estate investments compared to traditional stocks and bonds. Research on 20+-year data ending 2022 indicates that direct real estate can significantly enhance portfolio returns while mitigating risk and providing a diversification benefit crucial in today's economic landscape.
The chart below further illustrates the lower average volatility and higher average returns unique to private real estate.
How can private real estate improve your overall portfolio returns?
In two primary ways…
- Lack of correlation to stocks and bonds, essentially non-correlated to the public markets
- Long-term positive return expectation. This is due to several factors, but ultimately, private CRE and, more specifically, multifamily has a positive return history going back to the Great Depression in the 1930s.
Review the chart below. Portfolios that included alternative investments (investments non-correlated to the market and private real estate heavy) experienced reduced volatility and higher risk-adjusted returns. This stability is particularly attractive to investors who want to balance the stock market's often unpredictable fluctuations.
37th Parallel, one of the firms that we have introduced to WCI, has a new on-demand presentation called "Passive Investor's Guide to Multifamily Real Estate: 2024-2025." You may want to check it out. 37th Parallel, throughout its history, has been a great educator on how direct multifamily investing can work. They know what works across market cycles with over $1.1 billion in multifamily transactions and a 100% profitable investment track record.
Learn more about the current opportunities in the multifamily market here.
Learn More About 37th Parallel Today!
Jim and Brett
James M. Dahle, MD, FACEPFounder, The White Coat Investor
Brett Stevens, MBA
COO, The White Coat Investor
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