Real estate properties have grown in price over the past year, which made them even more appealing. Chris Kamberis, CEO of Kansas City-based Commercial Real Estate Development firm CTK Real Estate, explains that interest in real estate increased this year. While there is potential for remarkable returns, especially in the long-term, Kamberis cautions would-be investors to understand the risks, as well as the rewards that come with real estate investment.
When looking at average
20-year returns, commercial real estate investments maintain returns at of around 9.5%, safely above the S&P 500.
This is slighter lower than residential and diversified real estate ventures,
which boast long-term averages of 10.6%. For investors who want exposure to the
market, but are not interested in owning property, real estate investment trusts are ideal. For those who desire a more direct venture,
there are not many barriers for entry regarding property; anyone with a clear
strategy and enough capital can gain from the rewards of the market. According
to Kamberis, this can be a pitfall, as much as it can be a benefit. Investors
with solid capital behind them, but a lack of experience, may have to learn the
hard way just how dynamic the market is. “Factors, such as changes in
regulatory laws or shifting demographics can easily be overlooked, making what
appears to be a winning property one day, a bust in three to five years.”
As an attractive market with a diverse range of opportunities, a lot of investors have moved to commercial real estate, as well as apartment housing making it more competitive than it has ever been in the past. “A lot of new investors don’t realize how challenging commercial real estate can be,” says Chris Kamberis. “Ultimately, to succeed in the market, experience is necessary. Being familiar with legal and regulatory requirements, understanding how a property may react to downturns in the economic cycle and having the ability to adjust to changes in a particular sector are essential for success.”
For those who can predict economic cycles and hold sufficient business acumen, real estate investment can be highly rewarding. “Properties can generate income for decades, providing a reliable and very desirable source of investment earnings,” says the CTK Real Estate founder. Another advantage is that real estate tends to be more stable than the stock market. The down periods, however, can be debilitating. When the entire economy falters, some sectors in real estate will stop generating income altogether, and investors need to be prepared for this. Property can also be very difficult to sell when the economy sinks. This can tie up large amounts of capital for years, such as during the 2007 to 2009 Great Recession, which is still being felt in some regions of the country today. Alternatively, with commercial or residential real estate, the actual property is likely to rise in value in the long-term. Appreciation is one reason many investors who have a lot of capital behind them focus heavily on the real estate market. Kamberis, who has been a leader in property management for decades, suggests newer investors start small. That way, they will benefit of learning from others in the field, gain real experience and make invaluable connections along the way.
Property expert, Chris Kamberis is an established leader in the commercial real estate market with over two decades of experience. As the Founder and President of CTK Real Estate, a national portfolio acquisition and development company in Kansas City, MO, he has been the driving force behind some of the most progressive and complex expansions for commercial and industrial real estate. The company’s impressive roster of past and current clients features some of the world’s biggest corporations, including Bank of America, JP Morgan Chase Bank, Fifth Third Bank, McDonald’s, Burger King, BP Products North America, and Starbucks.
Opus Development plans 256 apartments over retail in Westport: http://www.bizjournals.com/kansascity/news/2017/03/06/opus-development-westport-256-apartments-retail.html New Westport player flips one of his properties for Opus’ redevelopment: http://www.bizjournals.com/kansascity/news/2017/03/07/ctk-group-developer-chris-kamberis.html