Why Real Estate?
Real estate is tangible. You can see it, touch it, feel it. It has a natural value and has produced significant wealth for centuries.
Real estate is one of the oldest investment classes in existence, producing significant wealth for centuries. We believe real estate is such a critical element to any portfolio that we have made it our primary focus. Real estate has numerous benefits but also makes an impact in the community by providing places for people to live, work, and play.
High Tangible Asset Value = Lower Risk
Real estate investments are shielded from massive losses because they are a tangible asset. Other investments such as stocks can dip to zero with bad business news or economic downturn, but there will always be value in the land and improvements that make up real estate.
Strong Returns vs. Volatility
Over the last 20 years, private real estate (NFI-ODCE) has generated higher annual returns than US stocks and bonds while experiencing significantly less volatility than stocks.
Many tax advantages of owning real estate pass through to a real estate fund’s Limited Partners. LPs can deduct depreciation and interest from their fund income to reduce their taxable income from their fund participation.
When prices for goods and services are rising, bonds and cash lose purchasing power (value). However, real estate correlates with inflation as property holds intrinsic value and as prices increase, market rent typically also increases.
US Real Estate Net Operating Income
2005 2007 2009 2011 2013 2015 2017 2019