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High Prices Deter Investors From Grabbing Commercial Property

WASHINGTON DC 05.16.2017


Demands, Drivers and Disruptors of Two of DC's Largest Tenant Groups

Tom Ikeler -- PN Hoffman
David Bevirt -- Brookfield
Dan Dooley -- Carr Properties
Real estate, mortgage, monopoly houses

Investors looking to get into real estate for safety and high returns are being deterred by rising prices in commercial property markets.

Both building prices and real estate stocks have climbed skyward since the financial crisis, and nowadays prices are so high they are dissuading investors, the Wall Street Journal reports. Experts have said commercial property prices are so high today investors have likely already captured most of their real estate’s future profits.

While it might be time for real estate's breakneck growth to slow, nobody could say it was not a good run — REIT index funds have enjoyed massive growth since the financial crisis. For example, the Vanguard REIT Index Fund posted 15.5% annualized returns from 2009 through last year. [WSJ]