Some people in Florida who have invested in the historically strong commercial real estate market may be concerned about reports indicating a potential downturn. In 2016, returns came in below the 20-year average for the first time since the financial crisis of 2008. However, those returns have hit double digits consistently throughout the past two decades, with an average of 10.1 percent.
While some forecasters have projected returns of 6 percent in the real estate sector for 2018 and 2019, all signs point to the continued vitality and reliability for commercial real estate as a profit center. The real estate market does experience cyclical downturns and upswings. However, analysts say the current situation does little to question the utility and value of investing in commercial real estate. Many outlooks fit the decreased returns as part of an overall positive environment for continued, rather than decreased, growth.
By its nature, the real estate market is designed to provide investors with long-term, stable gains rather than volatile, immediate changes. Since real estate is not liquid and requires time to buy and sell, the investment is far less subject to market whims than stocks and bonds. In fact, real estate can help to serve as a profitable bulwark against excessive market shifts during times of market downturn.
Investors who are considering new moves in the commercial real estate market may want to partner with an attorney. A lawyer can provide counsel on contracts, purchase agreements and potential concerns and benefits in any real estate deal.