The Benefits of Investing in CRE

Investing in and owning commercial real estate can be beneficial short and long term across a multitude of industries and professions. Commercial real estate is an investment option that offers size and depth for its market so that investors are less volatile than other comparable options. Here are seven benefits of investing in commercial real estate, Real Estate Investment Trusts (REITs) in particular: 

• Easy to Understand, Big Rewards: real estate investment trusts (REITs) are fairly easy to understand and tend to pay a high dividend. 
• Pass-Through Taxation: REITs have an advantage over other stocks because of their pass-through taxation. Meaning that they can have greater profits from which to pay shareholder dividends than similar sized organizations. 
• Non-Taxable Capital: depending on the distribution policy and annual earnings, a portion of a REIT's dividend may be deemed non-taxable. 
• Predictable Revenue Stream: because lease periods on commercial properties are typically longer, REITs can offer a pretty predictable revenue stream 
• Somewhat Resistant to Inflation: REIT rental incomes adjust themselves in line with cost of living and thus are less susceptible to devaluation related to inflation. 
• Great Option for Retirement Money: holding real estate investments in your IRA or other retirement account can results in decades of tax-free compounding and thousands more dollars in retirement savings. 
• No Headache: having a professional management team manage the day-to-day operations takes the headache of owning commercial property out of the mix - let the experts handle it!

When investing in any form of commercial real estate, it's important to choose a knowledgeable partner that you can trust. Learn how Block Funds can be that partner for you.

Contributor:

Brian Beggs, CFA
Director of Acquisitions
Block Real Estate Services
Block Funds