Time for real estate investment to catch up to the market
Where are the majority of our country’s real estate development investment dollars? Take a look at any of the highlighted projects GlobeSt.com, the de factor real estate investors website, and you’ll see the problem. In the now outdated industrial economy, it didn’t make any sense to build one customized widget when you could mass produce thousands for a lot less.
With investment it’s the same – all your pension and insurance payments are sourcing a tremendous pool of capital that has to be invested somewhere. To those investment managers, if you have billions, the least you want to invest in at a time is $5 million, which translates to $20 million projects. That precludes most every single human-scaled building you’d find in the coolest neighborhoods, leaving only large-scale strip malls, subdivisions, office towers… what you see on www.globest.com.
The thing is, the emerging you-centric market is demanding customized, not mass-produced. So how in the world is the supply of investment capital going to accommodate this? First of all, it will. Second, it will focus on the long tail of real estate development – all the $500K-$1 million investments that none of today’s major investors want (just like the 42 million video titles Blockbuster won’t carry) and devise a system to rehab and develop several of them at a time, just like Netflix devised a system to rent any one of 42 million of those ‘unwanted’ videos.
In other words, next generation investors will work with certified developers to buy several smaller buildings at once, provide them with progressive tenants upfront via beta communities, and enjoy a much greater return (financially as well as socially and environmentally) than if they invested the same amount in one globest.com project.
CoolTown Investments has the portfolio of development opportunities, city leaders, tenant communities and developers to make it happen – which investors are going to step up first? Contact us if that’s you.
About The Author
Interesting take on where capital sources are currently and where they are headed.
-4MySales
This is an interesting concept. I am a long time residential/small apartment investor whom is now emerging into commercial ventures. Myself and 2 colleges are looking to fill that niche of $500,000 to $2,000,000 range. We are activily seeking deals anywhere in the country. We are from NH, but have been to NC and TN trying to scout out projects. I am definetely interested in filling this niche!!!