Commercial Real Estate Investment 101

The U.S. is a capitalist market. Our very society is built on the drive to innovate and elevate wherever possible. Commercial and industrial real estate investing offers a myriad of benefits and revenue paths, including:

• Cash Flow: Commercial real estate investments generate cash flow from daily operations, rent, sales, and more.
• Diversification: Stocks and bonds may be familiar, but they’re more volatile and still carry some risk.
• Appreciation: Commercial real estate properties are assets that appreciate value with improvements and time, offering lucrative exit strategies.
• Tax Benefits: The tax benefits of real estate investing include tax-deferred income, capital gains tax qualification, the 1031 exchange, and more. Learn more about these benefits here.
• Hedging Against Inflation: As inflation escalates, so can the set cash flow numbers, keeping your profits safe.
• Lower Volatility: No matter what the publicly traded market is doing, private real estate investments offer a singular opportunity to increase capital.

A good investment is backed by solid data, market research, financial analysis, and irreplaceable expertise. Thoroughbred Ventures never undertakes a project we don’t think will pay off. Here are a few investment analytics we consider:

• Market Research
• Property Valuation Due Diligence
• Projected Performance Metrics
• Cash Flow Analysis
• Comparable Sales and Entities
• Risk Assessment
• Risk Mitigation
• Financing Options
• Local, State, and Federal Rules and Regulations
• Tax Planning

The best investment opportunities vary from market to market. What works in NYC may not be as successful in Dallas, TX. However, some market trends remain consistent. According to J.P. Morgan Chase, the mid-2024 outlook for commercial development and real estate opportunities is positive for many prospects.[2] J.P. Morgan’s data also revealed that office spaces were declining in demand, though co-working spaces are on the rise.

At Thoroughbred Ventures, we’ve seen profit and success in healthcare facilities and hospitality ventures such as food halls.

Purchasing commercial land offers a clean slate where you can purpose-build a whole new entity. Whether this is for a mixed-use facility, industrial space, or something more innovative, you can collect rent from tenants, exit, or operate a profitable business. Owning the land gives you unlimited access and a myriad of different opportunities.

The post-pandemic market saw a negative shift, largely due to cheap credit offerings, but in the right niches, the recovery from that state has been robust and consistent since 2021. There’s improved sentiment, projected transaction boosts, as well as anticipated interest rate reductions across the board.[3]

Each commercial project is unique in the projected return expectations, but as a market average, Bank of America reports that most commercial property investments offer an annual return of 6 to 12% of the purchase price.[4] This number could be significantly higher depending on the market, the cash flow opportunities, appreciation, tax benefits, and external considerations.

Thoroughbred Ventures is a well-connected, highly innovative investment company with a full stack of investment opportunities. We aim to maximize your investment with every project and develop something extraordinary. With TBV, you can expect that all our investment opportunities are planned with precision and care to ensure your financial investment is one you can be proud of.

Explore more educational materials about real estate investing with the resources below:

• Raising Capital For Real Estate
• Private Money Lenders For Real Estate
• Joint Venture Partnership Real Estate

The first step to becoming a commercial real estate investor is to fully grasp how industrial and commercial real estate is different from residential real estate. The scope, use, cost, and process of investing are vastly more complex but also far more lucrative.

You must also dive deep into comparable real estate ventures, understand how to calculate your success metrics, and how to mitigate cost contingencies. There are also some glaring but common pitfalls that new investors encounter, like neglecting comprehensive due diligence, a lack of financial awareness, inaccurate property valuations and cash flow expectations, trying to go solo, and more.

Working with a skilled and experienced team mitigates many of the hurdles to investing. Our deeply researched and trend-focused investment model is backed by data and designed over a decade of high-ticket experience. We curate uniquely structured opportunities for your direct participation in projects you can get excited about.

Our hand-selected teams of expert developers, architects, and property management firms are master-level operators. Each new venture is another opportunity for cash flow, passive income, tax benefits, and more.