Retail Real Estate can be an excellent way to generate cash flow and wealth either full-time or as an addition to any investment portfolio. Retail Real Estate as an investment combines financial security, long-term stability, inflation hedging, and tenant paid expenses along with the opportunity to be involved with food, fashion, capitalism, and community development. Over the past five years, retail real estate assets have produced an annualized total return to investors of 10.4%, compared to 10% for non-retail assets, according to MSCI Retail Real Estate mirroring similar results found in the National Council of Real Estate Investment Fiduciaries (NCREIF) Index.
Retail Real Estate has produced higher average annual returns over the past 20 years than the average returns produced by apartment buildings, industrial properties, and office buildings.
Retail Real Estate provides for investment stability with leases of 5, 10, and even 20 years. The income is consistent and known for longer periods of time than the typical apartment or self-storage lease. Retail Real Estate leases are usually with “Chain Stores” or sometimes referred to as “National” or “Credit” tenants. A lot of these tenants are publicly traded and/or “Investment Grade” with credit ratings at least BBB- or higher by Fitch and Standard & Poor or Baa3 or higher by Moody’s. You get the stability and reliability of a bond with the higher returns and tax benefits of real estate.
Concordia Realty has been successfully connecting sound economics with experience in real estate for more than 29 years. We are a premier private real estate investment and management firm that creates value for our Investors, Tenants and the Communities where these properties are located. Concordia Realty specializes in Retail Real Estate including Shopping Centers, Malls, and Single-Tenant Net-Lease properties with an emphasis on value added projects. Our wide range of experience has uniquely positioned us to redevelop and repurpose shopping centers that are experiencing disruptions related to technology and merchandising. This experience has built a skill-set that helps to add value to all of our real estate ventures.
We deliver increased returns to our investors, higher sales for our retail tenants, safer neighborhoods and higher valuations for our properties. Concordia Realty has been through three full cycles of real estate investment from 1990 through 2018. Our focus is on Risk Management and Preservation of Capital.
Concordia Realty’s investment strategy is designed specifically to avoid competing with larger funds for bigger investment properties. Likewise, Retail Real Estate is a specialized business that is not easy to jump into after buying a few apartment buildings or mobile home parks. Instead, Concordia Realty invests in small to mid-sized shopping centers which comprise the vast majority of all retail real estate assets in the United States. There are fewer professional operators to invest in such properties, and the market is inefficient, which allows Concordia Realty to arbitrage mispriced assets.
The Concordia Realty investment approach is focused on buying right, adding value, creating superior returns and building wealth by:
- We look for high-quality real estate with solvable problems. Buying sound real estate “Good Dirt” with strong fundamentals at a discount from the general market.
- Purchasing distressed or value-add real estate at a discount to replacement cost.
- Concordia Realty Invests in assets with potential to significantly enhance value and cash flow through creative structuring and proactive asset management.
- Repositioning properties to boost occupancy and create long term value.
- Concordia Realty understands that Retail Real Estate investment is a hands-on proposition including selective capital improvements, tenant leasing opportunities and correction of operating inefficiencies.
- Identify assets with the potential to implement investment strategies which allow multiple upgrade and exit scenarios.
- Timing purchase and sale along with capital improvement to maximize the tax benefits of owning the real estate investment.
- Contrarian investing in smaller or out of favor markets with higher cap rates and cash flow.
- Identify assets that don’t fit the “box” for traditional investors and capitalize on the market dislocation with midsized properties.
- Smaller markets go against the conventional wisdom of large institutions and foreign purchasers, however these markets could provide an investor with the capitalization rates that are about 800 – 2000 basis points higher than it would be in a gateway city.
- Leverage relationships with our network of real estate brokers and targeted sellers in order to source opportunities not widely marketed.
Traditional real estate investment entities such as pension funds, REITs, investment banks and opportunity funds, must typically deploy large amounts of capital per transaction. Yet, relatively few real estate assets are large enough to meet their criteria. Additionally, REITs and large institutional investors are selling off assets in in the middle of the country to redeploy those funds in coastal cities creating a buying opportunity throughout middle America.
By leveraging our relationships with property owners, brokers and financial institutions, Concordia Realty is well positioned to acquire “off-market” or less favored properties that can be actively managed and improved in order to generate attractive risk adjusted and highly tax efficient returns.
Concordia Realty’s depth of experience in multiple real estate sectors has also enabled the firm to implement dynamic repositioning strategies that may include change of use for a higher risk adjusted return.
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