Historical Lows & Strong Returns
As investors saw with the global financial crisis, inexpensive or budget priced commercial property isn’t the only ingredient for residential property investment success. The other key requirements for success include:
- Specialized management
- Viable and cost effective financing
- Strong market demand resulting from a large volume of industry, businesses, and people
When you combine those key requirements with a steady supply of low priced commercial property, you have the winning formula. The Fenix Income Fund provides the first and second requirements and the Phoenix area is abundant in the third.
Why Invest Now?
U.S. commercial real estate prices have been at historical lows since 2007 resulting from the combined effects of the US housing market collapse, the credit crunch and the Global Financial Crisis. While we are now seeing a gradual recovery in the US economy, this will take some time to gain momentum due to the ongoing effects of the European sovereign debt crisis.
Prices for commercial property have dropped 42% since their peak in October to December 2007, according to the Moody’s REAL Commercial Property Price Index. The index posted gains in three of the last four months of 2010 as set out in Figure 2 below. As you can see from Figure 2, commercial property prices are at similar levels to 2003 and this represents a buying opportunity, as you can purchase interests in high quality assets at low prices.
As you can see from the chart above, commercial property prices are at similar levels to 2003 and this represents a buying opportunity, as you can purchase interests in high quality assets at low cost. Then as the economic recovery gains momentum, real estate prices will rise, providing patient investors with strong investment returns. We also anticipate that the long-term benefits of investing in private real estate will persist, which will benefit all investors across the investment time horizon and risk-return spectrum.
Are you a Qualified Investor?
Fenix Private Capital Group offers investments only to those who qualify as an accredited investor as per the SEC guidelines. Take our questionnaire to find out if you qualify.