The Ultra Wealthy Bought the 2022 Real Estate Dip; Here Are 3 Investments For the Passive Investor – The Average Joe
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    The Ultra Wealthy Bought the 2022 Real Estate Dip; Here Are 3 Investments For the Passive Investor

    victorlei

    April 27, 2023

    Rising interest rates have sent the real estate markets into a tailspin — especially in the office space where property values have collapsed.

    But that hasn’t scared wealthy individuals and family offices — who have longer investment horizons — allowing them more flexibility to take advantage of dips in real estate prices.

    • Last year, the world’s wealthiest took advantage of a decline in the real estate market — picking up $455B in commercial real estate.
    • Zara founder Amancio Ortega bought 10 North American and UK properties worth over $2B.

    Here’s what they’re buying:

    Rental apartments were the most popular commercial real estate investment by far in 2022 — with the US being the most popular investment destination.

    Let’s take a look at three commercial real estate projects — each with its own unique opportunities.

    • Each deal is available to invest on CrowdStreet’s marketplace — with a minimum $25K investment.
    • Each deal includes a sponsor (i.e., developer or operator) who co-invests alongside investors.

    1. The Centra NYC: Fully-leased luxury apartment in Manhattan

    Why own a single unit when you can own a part of this entire 165-unit luxury high-rise residential building — steps away from Grand Central Station and the United Nations HQ.

    What’s interesting about this investment?

    • Off-market opportunity with a $2M purchase price reduction.
    • 2.5% vacancy rate (lower than the 6.6% national average).
    • The sponsor is taking on a market favorable 3.95% interest rate debt with two years remaining.

    Key numbers: Target return (21.4% IRR), investment period (5 years) — see full investment details.

    2. New Development: Self-storage facility in Long Island, New York

    Self-storage properties have exploded in popularity as a result of two trends: Remote work and new apartment developments getting smaller.

    What’s interesting about this investment?

    • This new self-storage development opportunity is located in supply-constrained Long Island — with 1,111 climate-controlled units managed by a self-storage leader.
    • Existing self-storage properties in the area saw a 94% occupancy rate — and 10% rent growth in the past year.

    Key numbers: Target return (20.7% IRR), investment period (4 years) — see full investment details.

    3. Build-to-rent development in Raleigh, North Carolina

    This is a development opportunity of 138 built-to-rent townhomes in Durham, North Carolina — the fourth fastest-growing metro area in the US.

    The neighborhood is just 30 minutes away from Research Triangle Park — one of the most prominent high-tech research areas, and home to 550+ life sciences companies and tech giants like Apple, Google and Amazon.

    What’s interesting about this investment?

    • The sponsor is putting in 44.1% of the investment — a strong boost of confidence in the project.
    • Corporate expansion in lower-cost-of-living regions has driven up rent prices in the Raleigh area.

    Key numbers: Target return (12.2% IRR), investment period (10 years) — see full investment details.

    Find other interesting investments on CrowdStreet’s real estate marketplace — named the best overall real estate crowdfunding platform by Investopedia three years in a row.

    Since 2014, over $3.9B has been invested through their platform, with 732+ deals funded. And of those deals:

    • 151+ properties have been sold.
    • 19.7% realized IRR (internal rate of return).

    Browse CrowdStreet’s marketplace (accredited investors only).

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