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Commercial Real Estate

• Right Tools, Right Now
• NAR REALTOR Benefits® Bringing you savings and unique offers on products and services just for REALTORS®.
• Directories Complete listing of state and local associations, MLSs, members, and more.
• Become a Member As a member, you are the voice for NAR – it is your association and it exists to help you succeed.
• Logos and Trademark Rules Only members of NAR can call themselves a REALTOR®. Learn how to properly use the logo and terms.
• Your Membership Account Review your membership preferences and Code of Ethics training status.
• Highlights & News Get the latest top line research, news, and popular reports.
• Housing Statistics National, regional, and metro-market level housing statistics where data is available.
• Research Reports Research on a wide range of topics of interest to real estate practitioners.
• Presentation Slides Access recent presentations from NAR economists and researchers.
• State & Metro Area Data Affordability, economic, and buyer & seller profile data for areas in which you live and work.
• Commercial Research Analysis of commercial market sectors and commercial-focused issues and trends.
• Federal Advocacy From its building located steps away from the U.S. Capitol, NAR advocates for you.
• REALTORS® Political Action Committee (RPAC) Promoting the election of pro-REALTOR® candidates across the United States.
• State & Local Advocacy Resources to foster and harness the grassroots strength of the REALTOR® Party.
• REALTOR® Party A powerful alliance working to protect and promote homeownership and property investment.
• Get Involved Now more than ever, it is critical for REALTORS® across America to come together and speak with one voice.
• All NAR & Affiliate Courses Continuing education and specialty knowledge can help boost your salary and client base.
• Code of Ethics Training Fulfill your COE training requirement with free courses for new and existing members.
• Continuing Education (CE) Meet the continuing education (CE) requirement in state(s) where you hold a license.
• Designations & Certifications Acknowledging experience and expertise in various real estate specialties, awarded by NAR and its affiliates.
• Library & Archives Offering research services and thousands of print and digital resources.
• Commitment to Excellence (C2EX) Empowers REALTORS® to evaluate, enhance and showcase their highest levels of professionalism.
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• NAR Newsroom Official news releases from NAR.
• REALTOR® Magazine Advancing best practices, bringing insight to trends, and providing timely decision-making tools.
• Blogs Commentary from NAR experts on technology, staging, placemaking, and real estate trends.
• Newsletters Stay informed on the most important real estate business news and business specialty updates.
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Whether you are new to commercial real estate or have a thriving business, your own professional development can keep your skills at the top level. Explore the many educational opportunities available through these Institutes, Societies and Councils, all part of NAR. There is an array of classroom and online learning options for your convenience. 

Discover how earning a designation can help you rise above and gain more business.

Affiliate Education

The CCIM Institute offers an extensive array of commercial investment management courses for those pursuing the CCIM designation. Additionally, CCIM Institute’s Ward Center for Real Estate Studies offers online education and live workshops in topics including current financial analysis strategies, communication skills, advanced negotiation techniques, high-tech marketing strategies, and sponsoring group investments.

Work towards your IREM credential more through IREM's course offerings in real estate management. IREM offers classroom courses, self-paced online education, webinars, and on-demand learning for real estate professionals.   

RLI's  LANDU offers face-to-face courses, online courses, web seminars, and On-Location Education Programs that are relevant to the unique business of land, as well as preparing real estate professionals for the Accredited Land Consultant certification.

The SIOR Center for Career Advancement provides commercial real estate education focused on the industrial and office arenas. SIOR offers e-learning courses, conference education, webinars, and resources for commercial boards.

While membership and the CRE designation is offered by invitation only, the organization serves as a resource for commercial professionals on a variety of topics. Their print publication, Real Estate Issues, is available in print and online, and the CRE Library features recent books, market reports, monographs and select articles written by CRE members.To learn more, visit cre.org/publications and cre.org/library .

NAR Courses

NAR's Center for REALTOR® Development , a member service of the National Association of REALTORS®, provides an easy way for working professionals to take the classes they want, when they want, in the convenience of their own home or office. The Center for REALTOR® Development uses state-of-the-art technology for continuing education credit, professional development, and designation certification. 

The Center for REALTOR® Development offers a number of courses to learn about commercial real estate.

NAR Academy at Columbia College

NAR Academy is an exclusive partnership between the National Association of REALTORS® and Columbia College. Developed by industry leaders and subject matter experts, NAR Academy’s innovative, stackable curriculum includes certificates, associate degrees, bachelor’s, and master’s programs that balance relevant content, practical skills, and cutting-edge information.

Explore NAR's full list of courses .

Events Calendar

Major commercial real estate events hosted by the National Association of REALTORS®; NAR's commercial affiliate organizations; REALTOR® associations; and other commercial national organizations, franchises, and firms.

March 10-13, 2024 RLI® National Land Conference Louisville, KY

March 12-15, 2024 MIPIM   Cannes, France

May 4-9, 2024 REALTORS® Legislative Meetings Washington, DC

May 19-21, 2024 ICSC Las Vegas, NV

September 17-19, 2024 C5 + CCIM Global Summit Hollywood, FL

November 8-10, 2024 NAR NXT, The REALTOR® Experience Boston, MA

View Highlights from the 2023 C5 + CCIM Global Summit

At the 2023 C5 + CCIM Global Summit , attendees enjoyed a wide variety of educational opportunities, including exclusive tours led by local industry professionals, and sessions covering hot topics like AI, the power of social media, best practices and strategies, commercial market trends and forecasts, all lead by commercial real estate experts.

Hear what attendees had to say about the 2023 event! Save the date for the 2024 C5 + CCIM Global Summit, September 17-19, in Hollywood, FL!

8-Week Online Course

Real Estate Investing & Analysis Certificate Program

Sep 09 - Nov 03, 2024

or $1,000/mo nth

Get the Brochure

View the full program syllabus as well as details on faculty, guest speakers and key learner benefits.

Get the brochure

Program overview, level up your real estate investing career, upon program completion, participants receive a digital certificate issued by wharton online.

The world's most recognized real estate investing certificate program

Learn to analyze real estate investments, blending investment theory, with real world financial modeling and analysis as it is done at the world’s leading real estate investment firms.

Learn institutional-grade real estate analysis

The barriers to entry in real estate are low but the barriers to success are high. Learn to approach real estate with an institutional lens that will differentiate you as both a professional and entrepreneur.

Learn from world renowned faculty and experienced real estate investors

You'll learn directly from legendary faculty, industry practitioners and executives at some of the world's leading real estate firms.

Gain a globally recognized certificate

At the conclusion of the 8-week program, participants receive a digital certificate from Wharton Online and program graduate access to lifelong career resources.

A unique collaboration with Wall Street Prep

Wharton Online has collaborated with Wall Street Prep, the real estate industry’s leading financial modeling training provider, to create a unique program that combines investing fundamentals taught by Wharton’s globally recognized faculty with rigorous, real-world skills taught by the industry’s top training provider. Wall Street Prep Real Estate clients include:

Wall Street Prep is a key part of the KKR Real Estate Analyst experience. One of the differentiating strengths of the WSP training program is its comprehensive real estate curriculum; spanning from the basics of real estate markets to real estate modeling across different industry segments. WSP instructors are seasoned real estate professionals with a wealth of practical knowledge.”

"We had an absolutely incredible experience working with Wall Street Prep. The Real Estate Financial Modeling training they offer is exceptional. WSP consistently delivers outstanding training, incorporating hands-on exercises and experienced instructors. We are thrilled about the chance to further collaborate and form partnerships with WSP in the future."

"Our experience with Wall Street Prep has been extremely positive. Their training provides a base that is essential in understanding the core skills of commercial real estate, and the fundamentals training lays the foundation for developing the technical capabilities needed to succeed in the industry."

Partnering with WSP has allowed us to provide our new hires with an immersive training experience that zeros in on the practical skills and concepts private equity professionals use every day. The instructors all have impressive PE backgrounds and truly understand the day-to-day roles of our analysts and associates.

Applicant profile

The Wharton & Wall Street Prep Real Estate Investing & Analysis Certificate Program is designed for finance professionals in their early to mid career seeking to understand institutional-grade real estate analysis.

Commercial Real Estate (CRE) Professionals

Early and mid career commercial real estate investors and operators seeking to develop their real estate investment expertise.

Investment Bankers

Investment banking analysts and associates seeking real estate roles or those that work closely with sponsors and operators.

Brokerage analysts and associates seeking real estate investment roles or those that work closely with sponsors and operators.

Professional Services

Consultants, lawyers, accountants and other advisors that work with real estate owners and support transactions.

Family Offices

Family offices and institutions looking to institutionalize their investment process, raise their first fund, or considering real estate investing.

Private Investors

Individuals investing personal capital or raising funds on a deal by deal basis who are looking to learn and apply institutional real estate best practices into their activities.

Private Lenders

Private lenders and credit professionals that work with real estate owners and operators.

Support Roles in Real Estate

Fund management, investor relations, custodial accounting and other support services for real estate.

Career Switchers

Early to mid career professionals seeking to transition into real estate.

Undergrad and graduate business, finance and accounting students applying for real estate internships and full time roles.

Support Roles

At a glance: may 2024 cohort.

Applicant Career Levels

Applicant industry, countries represented.

Applicant Employers Include ...

Top Roles Applicants Hold

8-Week Program Focusing on Real Estate

8-10 hour weekly time commitment, self-paced online learning experience, learn by doing with real case studies, how you'll learn.

The Wharton & Wall Street Prep Real Estate Investing & Analysis Certificate Program is an immersive learning experience made up of self-paced video lectures, real-world exercises, industry case studies and full faculty support.

Learn Directly From Top Real Estate Investors

Tailored learning through electives, the same training used by top real estate firms, earn a certificate from wharton online upon successful completion.

Upon successful completion of the program, your Wharton Online-issued certificate will be emailed to you in a digital format you can use to demonstrate your achievement on your LinkedIn profile and resume.

Program curriculum

Over the course of eight weeks, you will learn the concepts and practical technical methods that real estate investment professionals deploy in analyzing and executing real estate transactions. Delivered in a weekly self-paced online format, the program culminates in a closing ceremony and the receipt of a Certificate from Wharton Online.

Introduction to the Real Estate Asset Class

Module 1 serves as the cornerstone of the learning journey, offering an in-depth exploration of real estate as an asset class, the operational dynamics of real estate investment firms, and how to create value in real estate.

• History & evolution of real estate as an asset class
• Common investment strategies & property types
• Various real estate stakeholders & their respective roles in investments
• Real estate within the private market and alternatives ecosystem

The Real Estate Investment Framework

Module 2 provides a comprehensive overview of essential components in real estate investment, focusing on the investment approach, valuation methods, and various frameworks utilized in the industry.

• Foundations of real estate finance: NOI, cap rates, value, and returns
• Introduction to valuation methods: income cap, DCF, comparables, and replacement cost
• What is a real estate pro forma
• Measuring investment returns

Financing and Taxation of Real Estate

Module 3 delves into the intricacies of real estate structuring and financial engineering, focusing on common capital structures, tax considerations, and performance incentives within cash flow waterfalls.

• Capital structures and leverage
• Tax benefits and depreciation
• Joint venture structure, management responsibilities, & the GP/LP relationship
• Cash flow waterfalls & performance incentives

The Real Estate Deal Process

Module 4 immerses participants in the real-world intricacies of the real estate deal process. The focus is on bringing to life the key stages of an investment, from sourcing to business plan execution to disposition.

• Anatomy of the deal process: stages, workstreams & responsibilities
• The role of third parties & their functions
• Deal docs: NDAs, teaser, OMs, LOIs, PSAs, & loan document
• Key terms, due diligence items, and points of negotiation in an acquisition

Real Estate Investment Analysis & Financial Modeling, Part 1

Module 5 begins participant’s deep dive into real estate financial modeling. This module explores how real estate professionals analyze and underwrite investment opportunities, with a specific focus on modeling property-related cash flow proformas.

• Property level financial modeling fundamentals & best practices
• Multifamily, industrial, retail, and office operating cash flow builds
• Capital expenditure & other non-operating cash flow builds
• Defining & calculating net operating income (NOI)
• Acquisition and disposition values (direct capitalization method)

Real Estate Investment Analysis & Financial Modeling, Part 2

Module 6 continues the focus on real estate financial modeling. Students deepen their understanding of investment underwriting, specifically focusing on financing and capital structures. Participants explore modeling debt structures and levered cash flows, gaining insights into the intricacies of financing and its impact on investment returns.

• Debt structures & levered cash flows
• Investment returns - internal rate of return, multiple on invested capital, cash-on-cash yield, yield-on-cost
• Joint venture waterfalls & promote structures
• Acquisition vs. development models
• Using an investment model to inform investment decisions

Analyzing Market Risk Factors

Module 7 delves into the strategic thinking processes employed by real estate professionals when evaluating investment opportunities, focusing on both macro and micro market analysis. Market dynamics are explored, including demand drivers, supply-side considerations, and the impact of volatility on investments.

• Supply & demand dynamics
• Analyzing economic data
• Market rents & forecasting growth
• Market analysis

Analyzing Property Level Risk Factors

Module 8 continues the focus on strategic thinking processes employed by real estate professionals when evaluating investment opportunities, focusing on property-level risks. Emphasis is placed on risk management and the concept of risk mitigation, utilizing leases and mortgages to align risk and return dynamics with investor requirements.

• Identifying & mitigating micro risk factors
• Identifying & mitigating macro risk factors
• Balancing risk & return

Capstone Project: Investment Case Study

In the final module, participants are immersed in the practical application of the entire real estate investment process, covering transaction structuring, investment underwriting, due diligence, and analysis.

• Partnership structure & execution plan
• Due diligence
• Underwriting & financial analysis (upside, base, and downside cases)
• Investment highlights & risks
• Investment recommendation

Faculty & speakers

Benjamin keys, jessie handbury, aaron hancock, daniel mann, aaliyah ameer, eric bergin.

Karine Blanc

Matan feldman, bruce kirsch, lindsay tsumpes, dr. peter linneman, joshua kahr.

Jeff T. Blau

Anar chudgar, deborah harmon.

Christopher Méndez

Alan ratner.

Attend an information session

Tuition & payment options, join a global network.

Enrollees access a large and highly engaged global network of peers who are committed to give us much as they get and to support one another. Connections built throughout the program are strengthen via in person and virtual meetups, discussion groups and networking events.

Invitation-Only Wharton/Wall Street Prep Group on LinkedIn

Upon completion of the program, graduates receive an invitation to join the Wharton Online / Wall Street Prep Real Estate Investing & Analysis Certificate Program Alumni Group on LinkedIn. Through this group, graduates can directly connect with the entire graduate network, seek advice and access graduate-only online events and resources.

Local Connection for a Global Certificate

Program graduates come from over 40 countries, so while the program is global, connection is often created locally. Graduates gain access to their Local Alumni Slack Channel, designed to facilitate local connection for a global certificate.

Cross-Program Networking Events

Enrolling in a Wharton Online & Wall Street Prep Certificate Program is a unique opportunity to expand your professional network beyond your specific industry. Enrollees attend cross-program events attended by other Certificate Program learners and graduates in investment banking, private equity, hedge funds, asset management, venture capital, financial planning and analysis (FP&A) and other career tracks.

For Employers: Level up your professional development

Real estate private equity firms.

• Accelerate the new hire training timeline.
• Better compete for talent against large firms with extensive in-house training resources.

Owner/Operators & Developers

• Institutionalize your underwriting and diligence processes.
• Grow your portfolio by creating efficiencies in your execution processes.
• Better understand how your services and products fit into the real estate investment process.
• Equip your sales force to recognize opportunities to add value across your client’s investment processes.

Speak With Us About Enrolling Your Team

Earn 65 cpe credits with the real estate investing & analysis certificate program.

Wall Street Prep and Wharton Online are registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

Ready to get started?

Speak with an enrollment advisor, enroll to secure your spot in the program, what will i learn from taking this program.

The Wharton & Wall Street Prep will teach learners how to analyze private equity investments, blending investment theory with real world analysis as it is done at the world's leading private equity investment firms. For a complete curriculum, get the program brochure.

How often are programs offered?

How much time will it take to complete this certificate.

The course is designed to run for eight weeks, with a recommended workload of 8-10 hours of lectures, live sessions, and assignments per week.

What languages will the program be offered in?

This program is offered in English only.

How do I register for this program?

You can register for the program at any time through our Enrollment Form.

How much does the program cost?

Program tuition is $5,000. Tuition can be paid in full or in 5 monthly payments.

Do you offer tuition assistance?

What is the program refund policy.

This program is non-refundable.

Who can I contact for additional questions?

If you have any additional questions, please reach out to our enrollment team at enrollment@wharton.wallstreetprep.com .

By submitting this form, you agree to receive communications about this program.

FALL COURSE REGISTRATION  is open through August 29. Explore courses today.

• Academics /

Real Estate Investment Graduate Certificate

Develop practical, real-world knowledge and skills for investing in real estate.

Online with On-Campus Options

Next Start Term: Fall 2024

Registration open through August 29

What You'll Learn

• Insight on various investment opportunities through an understanding of land uses; the forces that drive property values; the life cycles of buildings and neighborhoods; how cities develop and change over time, and the real estate cycle.
• Hands-on experience creating financial models, analyzing cash flows, determining values, and measuring economic returns of real estate investments.
• Understanding of investment capital through a variety of debt and equity partnership structures.
• Knowledge of the tools of investment strategy, decision-making, risk mitigation, and enterprise management.

Register for Fall 2024

Enroll in your first certificate course this fall — no application required. Registration is open through August 29.

How to Register →

A Faculty of Real Estate Experts

Studying at Harvard Extension School means learning from the world’s best. Our finance instructors are renowned experts in their field and bring a genuine passion for teaching, with students giving our faculty an average rating of 4.6 out of 5.

Teo Nicolais

President, Nicolais, LLC

Our Community at a Glance

Going back to school doesn’t have to mean putting your life on hold. We’ve designed our courses and certificates to give you the flexibility to pace your studies to fit your schedule.

Average Age

Working Full Time

Students Outside the U.S.

Average Time to Complete

Certificate Courses

The professional graduate certificate in Real Estate Investment requires four courses:

• Principles of Real Estate (required course)
• Real Estate Finance and Investment (required course)
• Real Estate Enterprise Management OR Real Estate Development (select one)
• Electives (choose one course from select group)

You can  find courses  by course group and term — fall, spring, or summer — in the  certificate course search  within DCE Course Search & Registration platform.

Earning Your Certificate

Most of our certificates can be completed online and no formal application process is required to pursue a certificate.

To meet the requirements for the certificate, you must:

• Complete the  four certificate courses for graduate credit .
• Earn at least a  B grade  in each course.
• Complete the courses within three years .

Learn more about  pursuing a certificate  and the process of  requesting your certificate .

Stack Your Certificate Into a Degree

Stackable credential pathways allow you to earn multiple credentials by completing courses that meet overlapping requirements. In the short term, you can earn your real estate investment certificate. Once completed, those four courses may count toward either a master’s degree in finance or a master’s degree in management .

This stackable pathway offers an efficient, cost-effective way to earn short-term credentials to help fill immediate skill gaps and acquire specialized knowledge while building a foundation for long-term success that showcases your expertise in the field.

Learn how to plan a stackable credential pathway .

Affordability is core to our mission. When compared to our continuing education peers, it’s a fraction of the cost.

Harvard Division of Continuing Education

The Division of Continuing Education (DCE) at Harvard University is dedicated to bringing rigorous academics and innovative teaching capabilities to those seeking to improve their lives through education. We make Harvard education accessible to lifelong learners from high school to retirement.

Back to the Learning Center

8 Fundamentals of Commercial Property Investing for Beginners

Summary: In this article, you’ll learn the ins and outs of commercial property investing for beginners. As you learn more about investing in commercial real estate, you’ll also learn how to choose a commercial property investment that is right for your overarching financial strategy. Read on to learn how to get started.

Introduction

Commercial real estate properties typically refer to retail, industrial, office, warehouses, mixed-use, and apartment buildings. Did you know that investing in commercial real estate offers numerous advantages and potential benefits to the savvy investor? These advantages include: steady cash flow, readily available tenants, lower vacancy risks, and higher income potential.

However, before simply buying any commercial property, investors must complete due diligence, to ensure the property aligns with your investment strategy.

Fundamental #1 : Determine if Commercial Property Investing is the Right Strategy for You

Like residential real estate, investing in commercial properties will require your own due diligence. These complex real estate transactions will help you first understand if the potential property fits the right investment strategy for your financial needs and goals.

As its name suggests, a cash flow strategy involves understanding and managing your expectations. Before you move forward on this type of strategy, ask yourself the following types of questions.

• If the property has a lower monthly cash flow, does that mean it’s not as good of a deal?
• If the property has a higher monthly cash flow, but has other risks, does this mean that it is a good choice for my portfolio?

As you answer these questions, keep in mind that the strategies will be different for each property. Identify your expectations, manage those expectations, and then with an unbiased view, determine if the property will meet these expectations and thus reach your financial goals. Finally, the goal of cash flow properties is to be a more passive investment strategy, requiring a less hands-on approach (especially when compared to a value add property).

A property that is deemed “value add,” typically refers to one that needs some work completed before it can either, a) achieve higher monthly rent values, or b) be rented out to tenants. With this in mind, a value add property typically meets the following criteria:

• It needs renovation.
• There is deferred maintenance.
• The exterior / landscaping of the property needs to be improved.

The important thing to remember about a value add property is that this is an active strategy. Additionally, it will have a lot of moving parts, which means that you will need to rely on your local team in order to effectively complete every stage. Finally, as you add value to the property, you should recognize that your cash flow will typically be lower. However, once the value has been added to the property, then typically you will start to see higher cash flows, as well as a higher sale value when you decide to eventually sell the commercial property.

Holding Time

When you are looking at a property, you must determine what is an acceptable time frame. For example, cash flow properties are typically ready to be leased out immediately, while value added properties will need work done before leasing the units and / or the entire building. There are some general timelines that can be expected for each type of commercial investment strategy.

• Value add properties typically have a holding time of one to three years.
• Buying and selling within 12 months typically aligns with a flipping strategy (vs. a buy and hold strategy).
• Cash flow properties can be used to generate the income needed to invest in another property.
• Commercial properties in high appreciation areas will typically be held onto, since the opportunity for increased market rents is higher.

Appreciation

As you look at commercial properties, consider the potential appreciation. The following types of questions will help determine how long you want to hold onto the property, before deciding to sell.

• Is there high demand for land / space to build in the local area?
• Are more people (year over year) moving into the area?
• Have rental prices continued to increase (or decrease)?
• Are businesses flocking to the area?

These types of questions can help to not only determine your holding time for a commercial property, but can also provide insights into the projected appreciation of the investment.

Fundamental #2 : Determine if Multi-Family Investing is the Right Strategy for You

When investing in multi-family properties, you must decide what type of project you want to purchase. With this in mind, since multi-family properties are the closest to residential properties, most people tend to gravitate towards this type of building.

Cash Flow Project

A cash flow project will typically have the following features:

• This is the main driver to a multi-family property.
• High occupancy rates (ideally coupled with low turnover rates, i.e. residents typically renew their leases year over year).
• The units are leasing at or above current market rental rates.
• Expenses are low and / or covered from the rental rates being earned.

Value Add Project

A value add project will typically have the following features:

• Lower occupancy rates (especially when compared with competitor properties in the local area).
• The units are leasing below the current market rental rates.
• The exterior or interior needs to be updated.
• Operational costs are high (perhaps due to higher maintenance costs, increased expenses, or poor management).
• Typically more difficult to manage than a cash flow property.

Hold Period Project

For a hold period project, first compare cash flow to the value add potential of a property. The following types of questions can help determine if the multi-family property aligns with your cash flow needs, as well as your overall investment strategy.

• How do rents compare to the current market rental rates?
• How does the interior and exterior of the property (and units) compare to other properties in the area?
• Does the occupancy rate provide a high enough monthly cash flow?
• What can be done to either a) increase monthly rents, b) increase occupancy rates, or c) reduce operational costs?

Fundamental #3 : Determine if Retail / Triple Net Lease is the Right Strategy for You

A triple net lease (triple-Net or NNN) refers to a lease agreement when the tenant pays all real estate taxes, maintenance, and building insurance on the commercial property. Additionally, the tenant pays the agreed upon “normal fees,” such as rent, utilities, etc. Investors might want to purchase a commercial property and implement a triple net lease for the following reasons:

• A less hands-on strategy (typically used with a retail client).
• Returns can be less than other investment strategies, however this is a more passive strategy.
• The risk tends to be a bit lower.
• Easy to manage (generally the management fee is lower if a property manager is involved; however, most triple net leases don’t have a property manager).

This strategy is often implemented when you want to stimulate your portfolio.

Fundamental #4: Understand Commercial Property Financing

Commercial property financing is typically different than a residential property. In fact, many commercial opportunities require investors to meet higher income or net worth standards, while also being able to make a larger financial commitment.

Interest Rates

Interest rates for commercial properties are dependent on the current prime rate, as well as an understanding of how banks actually borrow the money needed to give you a loan with a fixed or floating interest rate.

• Prime Rate. The lowest rate that money can be borrowed commercially.
• How Banks Borrow. The banks get their money by borrowing for the prime rate, loaning it to you, adding an interest rate on top of it, and then the bank makes money off the spread.

Amortization

Banks might stretch out the amortization (AM) period. For example, you might have a 10 year loan with an amortization period of 20 years. In the latter case, the longer the AM, the less debt you will pay on a monthly basis. The shorter the AM, the higher the payment each month. As seen below, each AM period has its pros and cons.

• Longer AM has a lower debt payment, but a higher interest rate.
• Shorter AM has a higher debt payment, but a lower interest rate.

Length of Loan

The length of the loan typically correlates with the length of the lease. When deciding between financing options, it’s important to consider both the length of the loan as well as the amortization period.

Triple Net Lease / Retail Financing

Triple Net Leases and retailing financing are typically based on the following factors:

• The term of lease is examined to determine the amortization period, as well as the loan period.
• The down payment is usually between 25 – 35 percent.
• The interest rate is usually lower (however, it is dependent on the down payment made, as well as the lease period). Banks typically will refinance when the tenant renews the lease. However, the interest rate might change at this time and be higher than the average five to six percent interest rate that is typically granted.

Multi-Family Financing

There are several types of multi-family financing opportunities.

• Agency Lending. This type of financing occurs for properties that are valued at more than $1 million. This type of loan also has an amortization period of 30 years and a low fixed interest rate (for a set period of time).
• Traditional Lending. This type of financing has specific loan terms, usually has an interest rate between five to six percent, and often has a 25 year amortization period.

Single Family Financing vs. Commercial Financing

A single family home financing opportunity typically has the following conditions:

• It is amortized evenly over the term of the loan.
• It has a fixed interest rate throughout the loan period.
• There is a higher demand and typically a secondary market for the single family homes.
• It is often based on the appraisal of the home.

Commercial financing typically explores the following conditions:

• The term of the loan typically matches the lease period.
• There is usually a longer amortization period.
• The fixed interest rate is typically for a set period of time, and then enters into a “floating” period.
• There is a smaller secondary market, which means that the interest rates are typically higher.
• The loan is often based on the cash flow of the property, rather than its appraisal value.

Fundamental #5: Know How To Read a Commercial Rental Property Proforma

A commercial rental property proforma is essentially a financial analysis of the property. As part of this statement, you will need to review the gross revenue, vacancy rates, as well as the operating expenses.

Gross Revenue

The gross revenue is defined as the amount of revenue that you could receive if the property was 100 percent occupied.

The vacancy is typically a percentage of gross revenue. When calculating vacancy (as well as projected vacancy rates), most investors will generate financial models based off of five percent less than the current occupancy rate.

Operating Expenses

The operating expenses will include maintenance, utilities, property taxes, and management fees. Keep in mind that with a triple net lease property you won’t be paying the aforementioned operating expenses.

Generally speaking, multi-family properties should see 25 – 40 percent of the gross revenue dedicated to operating expenses. The latter sum will depend on numerous factors, including whether the property is considered to be a cash flow or value add property. If it is the latter, then you will need to keep renovation and property upgrade costs in mind when reviewing operating expenses.

Debt Service

The debt service portion of a proforma document refers to quite literally your debt payment, without including the operating expenses.

NOI (Net Operating Income) = Gross Revenue – Vacancy – Operating Expenses

The NOI is calculated as the cash that you will receive before taxes are taken out, but after you have paid all of your operating expenses. It is important to note that the NOI does not include your debt service.

The CAP rate is your NOI expressed as a percentage compared to what you paid for the commercial investment property. You can think of it as the ROI generated before the debt service is taken out.

Cash on Cash (COC)

The COC is your ROI after you have taken out the debt service. It is important to note that COC is not calculated on purchase price, but rather the down payment when you purchased the commercial investment property.

Internal Rate of Return (IRR)

The IRR will show how your investment is performing. It calculates this figure by showing the value of money (made in the commercial property investment) as it would compare to a different investment. In other words, the IRR helps determine if your money is properly “growing” with your current commercial investment property, or if there is another (stronger) investment opportunity that would lead to a higher IRR.

Fundamental #6: Understand the Triple Net Lease

As was previously mentioned, many commercial real estate investors who want to enjoy a lower risk and passive strategy will often explore the opportunities that exist with the triple net lease. It’s important to note that triple net leases are unique and include different criteria that must be met before going this route.

Absolute NNN (Triple Net)

An Absolute NNN will meet the following criteria:

• You own the building, the tenant is paying all of the expenses.
• Property taxes, maintenance, and insurance are paid by the tenant.
• The expenses, fees, monthly rent, etc. are all explicitly written into the lease. Additionally it is determined how the tenant will pay for the aforementioned expenses (i.e. will the tenant “pay you back” each month for expenses in addition to the agreed upon monthly rent, or will the expenses be billed directly to the tenant so that each month all you receive one rent check).

NN (Double Net)

In an NN, the following conditions are usually set:

• All expenses are billed to the tenant with the exception of roof, structure, and parking expenses.
• The expenses associated with the roof will vary. Typically in this situation, the roof will be something that is going to last 20 to 30 years, and thus will not usually provide high expenses during the term of the lease.
• The structure will depend on when the building was built, as well as how it was built, which will result in either lower or higher expenses to the owner.

Lease Terms

When examining the lease terms, keep the following ROI guidelines in mind:

• If the lease term is 3 years or less, then you want an 8 percent CAP or higher. The reason for the higher CAP is that there is typically a higher risk associated with a lower lease term.
• If the lease term is 3 to 5 years, then you want a 7 to 8 percent CAP.
• If the lease term is 5 to 10 years, then you want a 6.5 to 7 percent CAP.
• If the lease term is 10 years or more, then you want a 6 percent CAP.

Comps in Area (Rent and Sales)

It’s important to look at the following factors when thinking about investing in a commercial property with a triple net lease opportunity.

• Look at the rent prices, as well as common lease terms, for similar buildings in the area.
• Look at what a similar tenant is paying in rent (for a similar type of space in the area).
• Examine the recent sales in the area.
• What is the CAP for similar types of buildings that have recently sold in the area?

Grade of Tenant

The grade of the tenant should be evaluated when considering a triple net lease. To calculate the grade of the tenant you should ask the follow types of questions.

• What is their creditworthiness?
• Is the tenant trustworthy?
• Are they backed by a public company?

Generally, the higher the tenant grade, the lower the CAP. However, while the CAP might be lower, higher grade tenants are often lower risk.

Fundamental #7: Understand the Role of Property Management for Commercial Buildings

The role of property management in commercial real estate is a bit different than residential property management. A commercial property manager will have different responsibilities, depending on the type of property. For example, an owner will usually not have a property manager for triple net leases.

Additionally, how much is expected out of a property manager, will greatly influence the rate they are paid. If the owner takes a completely hands-off or passive approach, then the cost of property management will be higher.

Fundamental #8: Determine if Investor Assistance or Asset Management is Needed

Investor assistance is provided by an industry expert, as well as their property teams, to actively explore other real estate market opportunities.

• Some commercial investments will also offer Property Team asset management opportunities (so that you can take a more passive investment approach).
• You will gain the additional value of knowing that there are local experts on the ground, who will provide their direct input and apply their expertise to your commercial investment.
• Leverage the knowledge of an experienced investor when choosing a commercial real estate property.

When Should I Use an Asset Manager?

An asset manager is often used when purchasing a multi-tenant property. An asset manager can be especially beneficial when investors are trying to get a multi-tenant or multi-unit financed, and the process is more complex.

Asset managers are experts in their field, have extensive experience purchasing and managing these types of assets, and can guide you throughout the entire process. If you’re a beginner, asset managers can be very helpful.

10 FAQs About Investing in Commercial Property

Remember that you can always speak with your investment consultant to learn more about commercial properties and help decide the best investment strategy for you.

1 – I’m interested in being a CCIM (Certified Commercial Investment Member), where do I go for that?

Go to CCIM.com and take at least an introduction class, or the 101 class. These continuing education classes will provide a great introduction into the commercial investing market.

2 – Can you find a commercial loan fully amortized for 20 – 25 years?

The short answer is yes. It is more likely that you will get one for 25 if it comes from a local bank.

3 – Why does NOI (Net Operating Income) not include debt service?

The short answer is that “it simply doesn’t.” The longer answer, is that getting loans is a biased process, whereas cash is not, which is why NOI doesn’t include debt service.

4 – What is absolute net?

Absolute net means that the tenant pays all of the expenses. In this case, the gross value will be the same as the absolute net.

5 – Would a higher grade tenant result in a lower interest rate from the lender?

Yes it will, because the risk will be reduced to both you and your lender.

6 – Are closing costs included in CAP rate NOI calculations?

The short answer is yes, due to the fact that closing costs are considered a part of the initial investment and expenses, and are thus included within the NOI calculation.

8 – Who manages a Triple Net Lease (NNN)?

Typically you, the owner, will manage a NNN. However, if you do want a property manager, then you can always hire one to manage the NNN.

9 – What is the typical return for multi-family or retail property?

The return will depend on the demand within the market. For example, if there is high demand within the market, then you will typically have a lower return. However, the cash flow is often higher since there is a high demand. In other words, the strategy, market, and risk will directly impact the return of a multi-family or retail property.

10 – What about interest rates rising? How will that affect my cash flow when the rate adjusts?

You will typically have rent escalations within the lease to accommodate for the increase in interest rates. This will keep a steady cash flow as interest rates potentially increase.

Investing in commercial properties for beginners can be a daunting process. However, it offers a number of advantages including, higher income potential, lower vacancy rates, steady cash flow opportunities, and high grade tenants. With the help of an expert and performing your own due diligence, you’ll be well on your way to earning passive income through commercial real estate.

https://realwealth.com/learn/conventional-financing-specialty-financing/ https://realwealth.com/webinars/the-fundamentals-of-investing-in-commercial-property-part-2/ https://www.udemy.com https://www.fortunebuilders.com https://www.commercialpropertyadvisors.com https://www.thebalance.com

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Course Overview

Commercial real estate is concerned with property used for lucrative long-term investment opportunities, serving as a hedge against the volatility of common investment markets. The MIT School of Architecture and Planning (MIT SA+P) Commercial Real Estate Analysis and Investment online short course applies concepts from financial economics to commercial real estate, providing you with methods to answer real estate investment questions, along with the tools necessary to make sound investment decisions in the real world.

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What You’ll Learn in this Commercial Real Estate Course

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ORIENTATION MODULE – WELCOME TO YOUR ONLINE CAMPUS ONE WEEK

You’ll be welcomed with a personal call and get introduced to your online teaching and technical support network. Begin connecting with fellow participants while exploring the navigation and tools of your Online Campus.

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MODULE 1 – FINANCIAL ECONOMIC CONCEPTS AND TOOLS FOR REAL ESTATE

Apply financial economic concepts and toolsto real estate investments.

MODULE 2 – THE REAL ESTATE SYSTEM AND THE SPACE MARKET

Analyze interactions within the real estate system, and the space market in particular.

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Evaluate individual real estate investments using financial tools.

MODULE 4 – LEVERAGE, AND FINANCING THE INVESTMENT

Leverage, and financing the investment.

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The Ultimate Guide to Commercial Real Estate Investing

Introduction.

Real estate is a well-known asset class that has been used to build wealth for centuries, defend against inflation, and is sometimes referred to as recession-resistant. For those seeking to preserve their wealth while growing their portfolios, commercial real estate has historically proven to be a powerful and relatively stable investment vehicle.

Recent economic trends have spurred investors to gravitate to yield-generating opportunities that also diversify their portfolios. Investing directly in commercial real estate offers a way to achieve both goals.

Commercial real estate also gives investors an asset characterized by stable cash flow, appreciation benefits, and substantial tax advantages when compared to other popular asset classes.

In this guide, we’ll provide an all-encompassing rundown of commercial real estate investing, including an explanation of why commercial real estate can be a reliable investment path, how to assess commercial real estate opportunities, and suggestions on how to get started if you’re new to commercial real estate investing.

• Why Invest in Commercial Real Estate
• When to Invest in Commercial Real Estate
• Where to Invest in Commercial Real Estate
• Which Commercial Real Estate Investment Categories are the Most Reliable
• How to Assess Commercial Real Estate Investments
• How to Access Resources to Invest in Commercial Real Estate

1 – Why Invest in Commercial Real Estate

Commercial real estate investment is beloved by investors seeking refuge from the volatility of public equities. Office investing provides some of the most stable returns available among real estate asset classes. The long-term nature of the underlying leases (often 5-10 years) provides office owners with predictable, stable cash flows.

Direct co-investment in commercial real estate is also attractive because of its potential to produce returns for investors uncorrelated from public markets, while providing the security of a physical asset. Amongst the many reasons to invest in commercial real estate, here are the seven benefits that we believe are most compelling.

1. Diversification Commercial real estate investments have historically enjoyed a relatively low correlation with the stock market, which makes real estate a natural option for portfolio diversification . This low correlation protects your portfolio from significant loss due to a singular event.

2. Income Stream Investing in a stabilized real estate asset provides investors with steady, day-one rental income while also offering the potential for long-term capital appreciation. Because rental income is typically scheduled out in a lease, the cash flow generally has less volatility than other investment options.

3. Capital Preservation Real assets such as office buildings have observable, tangible value. This value is determined primarily by the quality of the building, the location, and the credit of the tenants in place, and these factors are not volatile.

4. Inflation Hedge Property values and rent levels have historically increased with inflation. Given that those two items are primary drivers of real estate returns, a natural inflationary hedge is built into almost any real estate investment.

5. Stronger Yield Potential Investors searching for stable yield opportunities generally look to the bond market, which has generated an average return between 5% and 6% since 1926. In comparison, direct commercial real estate investments can achieve average yields as high as 13-14% while still providing many of the same benefits as bonds.

6. Tax Advantages Real estate has long been considered a tax-advantageous investment option. Because of legislation in recent years, commercial real estate investment has become more intriguing than ever before. If structured properly, investors can continue to defer taxes on distributions while now also claiming other deductions, such as enhanced bonus depreciation.

7. Potential for Capital Appreciation The stock market is the most common place for investors to deploy their capital, largely due to the long-term growth prospects that stocks offer. Commercial real estate investing , however, can offer similar growth potential, albeit with a different set of underlying risk factors. For instance, by focusing on economic and demographic patterns, investors can acquire assets in locations that they believe will experience significant increases in demand or popularity, This can drive up property values and lead to strong capital appreciation.

More reading: 5 Reasons Every Investor Should Have Commercial Real Estate in Their Portfolio 1031 Exchanges: The Rules and Benefits for Real Estate Investors

2 – When to Invest in Commercial Real Estate

Whether you’re a bear or a bull about the economy, NOW is a great time to invest in commercial real estate.

As the number of investors seeking direct co-investment into real estate continues to rise, so does the opportunity to allocate capital on a deal-by-deal basis. Investors today also benefit from a steadily growing economy, interest rates that remain at historical lows, and commercial lenders willing to do whatever it takes to win borrowers’ business.

Here are five other reasons why now is the time to invest in commercial real estate:

1. Increased Demand for Office Space With a maturing millennial generation entering its prime earning years, corporate giants growing even larger, and companies eager to get workers back into offices – safely distanced – after a year of working remotely, the demand for more square footage is clear.

2. Ongoing Cash Flow One of the most important benefits of commercial real estate is the cash flow generated from rents. Secured by leases, commercial real estate investments can deliver consistent, passive income; income that comes in regardless of market cycle.

3. Hedging Against Inflation In general, when inflation occurs, rents rise. This rise leads to an increase in operating income, which subsequently results in an increase in property values. The nature of this dynamic allows commercial real estate to serve as a strong hedge against inflation.

4. Low Volatility Over the long term, the value of real property in the U.S. – including commercial buildings – has consistently gone up. The counter-cyclical nature of commercial real estate, coupled with low correlation to other asset classes (when invested in directly), can act as a defensive position during times of economic pullback.

5. Appreciation Potential Under the right ownership, commercial assets are likely to appreciate in value. This implies that there is potential to garner additional returns when an asset is sold.

More reading: Strategies in Today’s Market: Opportunistic Options Why We’re Optimistic About 2021

Terms to Know

Accredited Investor: The qualification standards to investment in the private capital markets, as defined by the SEC.

ROI: Return on Investment. A comparative metric that accounts for the ratio between the profits and cost of an investment.

Cost Segregation Study: The process of identifying all property-related costs that can be depreciated faster. This could be from acquired property, new construction, or even remodels or build-outs.

Net Migration: Using data from the U.S. Census – and eliminating any fluctuations caused by births or deaths – net migration determines how many people are moving to or away from each metro area.

MSA: Metropolitan Statistical Area. Delineated by the U.S. Office of Management and Budget (OMB) as having at least one urbanized area with a minimum population of 50,000.

Gateway Markets: A gateway market is a major international city that serves as an entry point into a country. These cities are often the largest or the capital cities of countries, with the highest status and name brand value; often home to either container ports for cargo ships or large international airports; and offering highly diversified economies that have many sectors and subsectors. In the U.S., the gateway cities are New York, Washington D.C., Los Angeles, San Francisco, Boston, and Chicago.

3 – Where Should You Invest in Commercial Real Estate?

When considering investment opportunities, we at Excelsior ask the question: “Which markets around the country are attracting both jobs and people that have desirability and quality of life attached to them?”

Many real estate investors have long been attracted to office investments in prime business centers of the U.S. gateway markets. However, due to recent demographic shifts driven by the millennial population, interest has been shifting to office investment opportunities in non-gateway cities, particularly secondary markets.

At our firm, we look for markets that provide residents access to affordable housing, a strong public education system, and a high quality of life.

We also target diversified economies – cities such as Nashville , Tenn.; Austin , Texas; Columbus, Ohio; Richmond, Va.; Raleigh-Durham, N.C.; and Denver, Colo. These metro areas maintain a well-rounded presence across sectors, including government, university, healthcare and professional services, and do not rely on one type of industry for broad support.

When identifying secondary and suburban growth MSAs, we encourage investors to track the following seven data points:

1. Population Growth ( Net Migration )

A city’s population growth drives demand for real estate. As more people move to certain areas, the need for additional work space will follow. For commercial office properties, we’ve identified specific millennial trends (ages 18 to 34) as a strong indicator of future demand.

2. Job Growth Where are jobs growing and corporations going? In a post-COVID environment , will large companies rethink moving a portion of their labor pool from high-rent, high wage, high tax states to those locations that offer more value?

When evaluating this metric, we also account for unemployment and average salary. The U.S. Bureau of Labor Statistics finds some of the year-to-year biggest workforce gains are in Orlando, Minneapolis and Des Moines.

3. Wage Growth Wages have remained stagnant in the United States for decades, and the pandemic has certainly not improved this reality. Unemployment rates also rose considerably, which has added to the difficulty of rising costs overall. Wage growth is an important factor to evaluate when assessing the attractiveness of a potential investment market for commercial real estate.

4. Access to Quality Education Access to quality education is one of the driving forces behind where families choose to work, live, and play. When assessing investment markets, look at data from sources such as the U.S. News Best High Schools rankings . You can determine the availability of quality education by calculating the average college readiness score of all public schools in the metro area and comparing it to that of all the other ranked metro areas.

5. Access to Affordable Housing The steep hurdle to investing in coastal gateway cities is their high cost of housing. Realtors and other trade groups compare home prices to local median income. As much as anything, home costs relative to other cities is what attracts real estate investors.

6. Rising Rental Rates Increased rent means landlords bring in more revenue. This factor is, naturally, a clear sign of an attractive region for investors in commercial real estate.

7. Discount to Replacement Cost A sales price below replacement cost is generally considered one potential indicator of attractive pricing for the buyer. We believe that a consistent approach to estimating replacement cost is a necessary starting point in order to evaluate the discount a given price represents. In addition, an examination of the relationship between current rents and replacement rents (the rent necessary to justify new construction) is a helpful tool to estimate the potential for future rent growth.

More reading: Why You Should Consider Investing in Secondary Cities 7 Data Points to Consider When Investing in Commercial Real Estate What is Flex Real Estate and Why is it a Good Investment?

4 – Which Commercial Real Estate Investment Categories are the Most Reliable

Commercial real estate investments can show more resilience than other investments , but not all asset classes of real estate investments are created equally. The properties likely to best perform in a recessionary environment will have four characteristics:

• Good location
• Strong fundamentals and functionality
• Sufficient cash flow
• Modest capital needs

Here are four types of commercial real estate assets that have been proven to be durable when times get tough:

Self-Storage Facilities The four Ds — downsizing, divorce, dislocation and death – are aspects of real life. Recessions tend to exacerbate these life events, leading to increased rental activity in the self-storage space. When companies and consumers downsize, self storage spaces see higher demand. In fact, self-storage REITs were the only real estate asset type that was positive during the recession in 2008.

Medical Office Buildings Medical office buildings ( MOB ) should provide investors with long-term rent upside even in the event of a downturn , according to industry experts. MOB tenants tend to have strong credit, though every tenant is unique and should be evaluated on an individual basis. Medical office buildings that possess anchor high-credit, long-term tenants can potentially attract even more of the same, as healthcare providers generally prefer to be situated near complementary services.

Mobile Home Parks Mobile home parks have been called “the darling of all commercial real estate .” That’s a pretty big label considering investors looked down their nose at this asset class a few years ago. Mobile home parks tend to be recession resistant, limited in supply, in high demand because of the affordable housing crisis, enjoy low competition and low operating costs.

Multi-Tenant Office Properties in Suburban Growth Markets Though not in line with historical trends, we’d like to introduce the idea that multi-tenant offices – specifically located in suburban growth markets – deserve a place at the table. The belief being that secondary and suburban markets will continue to see increased population and job growth post-pandemic. Income-oriented, multi-tenant office space – especially when anchored with credit-quality, long-term tenants ( WALT 5+ years) – has the makings of a resilient asset in the midst of a recession. Landlords benefit from long term leases and banks look favorably upon them.

More reading: The 4 Most Recession-Resistant Commercial Real Estate Asset Types [Webinar] The Future of AI in Real Estate – How to Leverage the Data that Matters

5 – How to Assess a Potential Commercial Real Estate Investment

When assessing a real estate investment, the most important consideration is the ROI, which represents the potential of income-producing assets. A higher ROI implies that the profits you’ll receive from an investment property compare favorably to its cost. As an investor, this metric is key to comparing several different investment opportunities.

Being able to accurately calculate the potential profits from an investment property before acquisition is crucial to gauging and increasing the chance of a successful investment.

How is ROI calculated? The formula is simple:

ROI= (Proceeds from Investment – Cost of Investment)/Cost of Investment

• Calculate the expected annual rental income
• Subtract rental expenses from annual rental income
• Compute your % share of the net income
• Divide your net income by your total investment

To calculate ROI, you need to have a firm grasp on which variables affect these data points.

Rental Income One of the main benefits of investing in real estate is the potential for immediate income: tenant rental payments. If a property you are considering investing in comes with tenants already in place, you will want to consider a few variables in their leases before determining if it is a suitable investment:

1) The amount of time left in a tenant’s lease . Is their lease about to run out? If so, what is the likelihood they will renew? 2) The financial security of the tenant . Are they credit worthy? Will they stay in business? 3) The amount of space a tenant occupies relative to the total building size . How much risk are you taking on if that tenant were to leave?

Operating Expenses Common expenses of owning an investment property include utilities, maintenance, property taxes, and insurance. These costs can add up quickly, so it’s essential to have a thorough understanding of a property’s operating expenses and how they compare to your total rental income.

Property Appreciation Another reason that investors flock to real estate is for its potential to appreciate. When considering an investment, key indicators such as year-over-year job growth, population growth, economic growth and industry diversity have historically been important factors driving the increase (or decrease) in property value over time.

Capital Expenditures When evaluating a potential investment, it is extremely important to consider the capital expenditures that may be needed after your initial investment. In order for your property to appreciate, you may need to invest in updates and renovations in addition to the ongoing maintenance and repairs. These capital expenditures can be costly in the short-term, but in the long run they substantially increase the potential for appreciation.

Is This Property a Good Investment? After considering all of the variables and calculating your potential ROI, you’ll have to come to a conclusion about whether this investment is worthwhile.

If you’re unsure about the ROI you have projected, you may want to consider working with a partner that can walk you through the process we’ve highlighted above and help you assess the potential of a commercial real estate investment.

More reading: 6 Strategic Upgrades That Add Value to Commercial Office Space (and make tenants happier)

6 – How to Access Resources to Invest in Commercial Real Estate Investing

One of the most common challenges many real estate investors run into is having enough cash reserves to participate in all of the deals that interest them. If your goal is to create an asset stack, you first have to focus on capital accumulation.

One often overlooked source of investment capital is Cash Value Whole Life Insurance. Using life insurance as an investment vehicle yields unique benefits. Life insurance is uncorrelated to the market, allows tax-free accumulation and distribution, delivers tax-free dividends, and is 100% creditor protected (depending on the state).

When you leverage life insurance cash value as a source of capital, you can essentially create your own private “bank” by readjusting the flow of your money. In essence, you are procuring a loan from the insurance company in order to deploy capital. Not only can this method of capital accumulation allow you leverage you may not have known you had, it can also help to grow its value in one of the most tax-efficient ways allowable.

Watch this webinar to learn about the power of Cash Value Whole Life Insurance as an investment vehicle and real world examples of how it works.

More reading: The New Definition of “Accredited Investor” How to Determine if You’re an Accredited Investor

Resources for Commercial Real Estate Investing

If you’re just getting started in commercial real estate investing, here are some additional resources that might be helpful.

• Best Cities For Jobs: Growth In America Is Tilting To Smaller Cities (Forbes)
• The Demographics Driving Real Estate Investments in Non-Gateway Cities (Pensions & Investments)
• Even Before Coronavirus, Census Shows U.S. cities’ Growth was Stagnating (Brookings)
• Millennials Continue to Leave Big Cities (Wall Street Journal)
• Second-tier Cities Boom, but Can They Keep up with Growth? (BizWomen)
• Diversified Economies Matter (Emsi)
• What Makes a Real Estate Market a Gateway Market? (Mashvisor)
• Real Estate Recession: Who Gets Impacted and How (Million Acres)
• Crushing It in Apartments and Commercial Real Estate: How a Small Investor Can Make It Big
• Green Street
• BiggerPockets
• Cushman & Wakefield
• Crowdstreet
• CPExecutive.com
• Our friends at StoneCentury Financial can provide a complete breakdown of an investment property with their ROI calculator so that you know exactly what you’re getting into before investing.

After one of the most volatile periods in history, people are looking to allocate their portfolios to secure long-term, reliable investments, such as real assets. The benefits of commercial real estate include tax benefits; higher yields than public markets; the ability to lock in long-term debt at attractive costs; physical assets with capital preservation; and labor and material costs continuing to rise with inflationary pressures on the horizon.

Ready to get started with a commercial real estate investment?

If commercial real estate is a market that sounds appealing to you, please reach out to us. We would be delighted to work with you to assess the best commercial real estate investment options for your particular circumstances and goals.

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Commercial Real Estate Investing for Beginners

By peter harris.

Commercial Property Advisors (CPA) is the leading commercial real estate investing education and mentoring firm in the world. Led by Peter Harris, author of Commercial Real Estate Investing for Dummies, CPA has transformed more beginners into successful commercial investors than any company in history. This 10 hour video course is the most comprehensive training of its kind available and it's absolutely free! The lessons you will learn are absolutely priceless.

Your Instructor

Peter Harris is recognized as the leading commercial real estate investing mentor. Starting out professionally as an introverted engineer, he purchased his first apartment building in 2001, with the help of mentorship. He discovered that with the right help, investing in commercial properties could bring in more money per month than his full time job. Soon thereafter, he was able to quit his day job and live a life of freedom and choice.

Others took notice of his lifestyle change, began asking Peter for investing guidance and thus began a life long passion for teaching others how to invest in commercial real estate. Peter went on to become a best selling author , establish the most popular commercial real estate YouTube channel and mentor people from all walks of life on commercial real estate and multi family apartment investing. When not building up his own portfolio and helping others become financially free, Peter enjoys spending time with his family and serving his church.

Course Curriculum

• Start Introduction to Commercial Real Estate Investing for Beginners (4:42)
• Start Can Anyone Invest in Commercial Real Estate? (0:43)
• Start Where Do You Begin? (1:09)
• Start Dispelling the Myth that Commercial Real Estate is Difficult (0:42)
• Start 10 Best Commercial Real Estate Opportunities (0:16)
• Start 4 Guiding Principles of Commercial Real Estate Investment (0:16)
• Start 3 Examples (0:41)
• Start 3 Reasons Why You Should Become Commercial Real Estate Investor (0:05)
• Start # 1 You're in Control (1:09)
• Start # 2 More Life Options (0:21)
• Start #3 All it Takes is 1 Deal (0:39)
• Start Do You Have the Right Mindset to Own Commercial Real Estate? (1:46)
• Start Wrong Mindset for Purchasing Commercial Real Estate (2:29)
• Start 3 Examples of a Customer Mindset (4:18)
• Start Where Does the Customer Mindset Come From? (1:35)
• Start What the Right Mindset Looks Like (1:12)
• Start Wealth Ratio (1:01)
• Start How to Make a Comeback from Failure (2:23)
• Start What an Entrepreneur Mindset Looks Like (Example 1) (1:23)
• Start What an Entrepreneur Mindset Looks Like (Example 2) (1:28)
• Start How to go from a Customer Mindset to an Entrepreneur Mindset? (0:50)
• Start Is Bigger Better? Commercial vs Residential Introduction (0:19)
• Start Commercial Real Estate for Beginners (0:39)
• Start Is Bigger Better? (0:48)
• Start 4 Plex vs 5 Plex (0:45)
• Start Credit vs Income (1:52)
• Start Education (0:48)
• Start 1 Deal is All You Need (1:45)
• Start Property Management (1:05)
• Start Commercial Real Estate is for Anyone (0:45)
• Start Starting Small in Commercial Real Estate Introduction (0:45)
• Start Natural Progression of a Successful Commercial Real Estate Investor (1:33)
• Start What is a Small Commercial Real Estate Deal? (1:10)
• Start Why You Should Choose Smaller Commercial Deals (2:23)
• Start 4 Investment Strategies for Small Commercial Deals (5:56)
• Start The Ladder of Success (4:48)
• Start # 1 Question You Should Ask Yourself (2:38)
• Start Arnold Schwarzenegger Started His Empire with a 6 Plex (1:03)
• Start Arnold’s Beginning (0:56)
• Start Growing His Commercial Portfolio (0:55)
• Start Fund Your Dreams (1:52)
• Start What are YOUR Dreams? (0:40)
• Start 7 Commercial Real Estate Terms You Should Know Introduction (1:02)
• Start Term # 1 - Net Operating Income (NOI) (5:49)
• Start Term # 2 - Cash on Cash Return (4:42)
• Start Term # 3 - Capitalization Rate (Cap Rate) (4:49)
• Start Term # 4 - Debt Coverage Ratio (3:32)
• Start Term # 5 - Price Per Unit (4:21)
• Start Term # 6 - Building Classification (5:07)
• Start Term # 7 - Types of Leases (4:36)
• Start Term # 8 - Bonus Term Relationships (2:10)
• Start Apartment Investing for Beginners (1:00)
• Start Why Starting Out With Apartments is a Good Thing (0:06)
• Start A. Demand (1:11)
• Start B. Availability (0:21)
• Start C. Ability to Understand (0:55)
• Start D. Loans Readily Available (0:42)
• Start 7 Things to Look for When Investing in Apartments (0:08)
• Start 1. Have a Goal (0:30)
• Start 2. Area/Location (1:44)
• Start 3. The Property (1:13)
• Start 4. The Numbers (0:38)
• Start 5. Management Strategy (0:39)
• Start 6. Exit Strategy (0:54)
• Start 7. Ask Tough Questions (0:35)
• Start The Three Areas Most Beginning Investors Go Wrong (0:12)
• Start 1. They tend to believe their property financials based off the brochures (1:21)
• Start 2. They underestimate the expenses of the property (1:54)
• Start 3. Property Management Oversight (1:22)
• Start *Bonus* The Perfect Deal (0:29)
• Start Breakdown of My Very First Apartment Deal (4:50)
• Start Action Plan for Getting Started (0:13)
• Start 1. Get Educated (0:24)
• Start 2. Find a Friendly Broker Who Specializes in Apartments (1:40)
• Start 3. Start Visiting Apartments that are For Sale (0:36)
• Start 4. Get Your Financing in Order (0:43)
• Start 5. Create a Relationship with a Local Property Manager (1:34)
• Start 6. Get Your Mindset Right (0:35)
• Start 7. Do Not Give Up (0:33)
• Start Mark Twain, “The Secret to Getting Ahead is, Getting Started.” (0:36)
• Start Introduction to Buying a Multi Family Small Apartment Building (1:27)
• Start Personal Benefits of Small Multi-Family Apartments (2:21)
• Start Investment Benefits (2:16)
• Start How to Create Your Own Deal Flow (0:41)
• Start 1. Real Estate Agents (4:57)
• Start 2. Precision Direct Mail (4:49)
• Start Why Start with 5 Unit Apartments, Not 4 (4:59)
• Start Financing Your First Small Multi-Family Apartment Deal (0:16)
• Start 1. Conventional Financing (2:17)
• Start 2. Creative Financing (4:40)
• Start What Does it Take to be Successful in this Business? (1:30)
• Start Mobile Home Park Investing Introduction (3:52)
• Start PART 1: 2 Types of and 5 Figures that Demonstrate Demand for Mobile Home Parks (3:40)
• Start PART 2: Why Invest in and 3 Misconceptions of Mobile Home Parks (6:32)
• Start PART 3: 5 Tips on What to Look For and 3 BIG No-Nos (9:17)
• Start PART 4: How and Where to Find Mobile Home Park Deals (5:10)
• Start PART 5: 3 Most Common Ways to Finance Your First Mobile Home Park (5:20)
• Start Don't Miss Great Mobile Home Park Deals (0:32)
• Start No-No #1: Rejecting Deals with Park Owned Homes (4:02)
• Start No-No #2: Rejecting Deals with Lots of Vacancies (3:55)
• Start No-No #3: Not Having an Exit Strategy (3:41)
• Start Self Storage Investing for Beginners Introduction (1:27)
• Start Why Invest in Self Storage Facilities (5:07)
• Start Finding Self Storage Deal (3:41)
• Start 3 Main Types of Self Storage Facilities (3:19)
• Start 2 Main Type of Deals Scenarios (1:20)
• Start 7 Things to Look For (0:15)
• Start # 1 - Size (0:47)
• Start # 2 - Unit Mix (0:40)
• Start # 3 - Location (2:00)
• Start # 4 - Traffic Count (0:27)
• Start # 5 - Signage and Visibility (0:33)
• Start # 6 - Management (0:24)
• Start # 7 - Drainage (0:53)
• Start How to Fund Your Self-Storage Deal (2:08)
• Start Sources of Money to Finance Your Self-Storage Facility (3:07)
• Start 2 Biggest Myths of Self Storage (3:23)
• Start Let’s Analyze a Deal (1:02)
• Start Is This a Good Deal? (8:07)
• Start 5 Reasons to Invest in RV Storage (4:46)
• Start Diversifying: From Apartment Investing to RV Storage (2:14)
• Start Benefits of RV Storage (1:55)
• Start Financing the Deal (2:07)
• Start Expansion: Upside Potential (7:07)
• Start Operations and Management (9:58)
• Start Words of Encouragement from Chris (2:06)
• Start Summary: Growing a Family Business, Increasing in Wealth and Cashflow (2:09)
• Start New Lecture
• Start Introduction to Funding Commercial Real Estate Deals (1:10)
• Start Funding Types and Topics to Discuss (1:05)
• Start The 3 Main Differences Between Commercial and Residential Lending (1:53)
• Start What Commercial Lenders Like and Don't Like (1:32)
• Start The 8 Most Common Commercial Conventional Loans (4:05)
• Start Creative Commercial Financing (1:33)
• Start 4 Different Types of Creative Commercial Financing Methods (7:36)
• Start Conclusion (0:32)
• Start 6 Ways to Raise Down Payment Money for Commercial Real Estate (1:24)
• Start 1. Raising Capital From Private Investors (1:26)
• Start 1. How Do You Structure a Deal With Private Investors? (2:39)
• Start 1. How Do I Know if My Deal is Good Enough to Attract Investors? (2:43)
• Start 2. Raising Money For Commercial Real Estate Using Creative Financing (4:18)
• Start 3. Raising Money For Commercial Real Estate Using Self-Directed IRAs (3:16)
• Start 4. Raising Money For Commercial Real Estate Using Crowdfunding (3:27)
• Start 5. Raising Money for Commercial Real Estate Using Peer-to-Peer Lending (3:35)
• Start 6. Raising Money For Commercial Real Estate Using Wholesaling (1:41)
• Start Peter's First Experience Raising Money For Commercial Real Estate Deals (5:03)
• Start Introduction: Unleashing Your HELOC Power (0:46)
• Start How Does a HELOC Work (2:43)
• Start How to Unleash Your HELOC Power to Purchase Commercial Property (3:12)
• Start 4 Questions to Ask When Considering a HELOC (2:34)
• Start When Not to Use Your HELOC to Purchase Commercial Property (1:37)
• Start Conclusion: Follow up With These Teachings (0:38)
• Start Creative Financing for Commercial Real Estate (1:23)
• Start 7 Reasons to Use Creative Financing in Your Commercial Real Estate Deals (1:28)
• Start 1. Leverage (0:27)
• Start 2. CASH (0:28)
• Start 3. Commercial Wholesalers (0:43)
• Start 4. Knowing How to Structure Creative Deals (0:13)
• Start 5. How to Deal with a Seller Concerned About Capital Gains Taxes (0:25)
• Start 6. Dealing With a Seller Who is Ill, Elderly, or Burnt Out (0:32)
• Start 7. FUN (0:17)
• Start I Know For a Fact... (0:34)
• Start What’s the Secret to Structuring Seller Financed Deals of Any Size? (1:37)
• Start Three Fundamental Strategies of Creative Commercial Financing (3:01)
• Start Strategy # 1 - Owner Carry First Mortgage Example (4:40)
• Start Strategy # 2 - Owner Carry Second Mortgage (3:36)
• Start 4 Reasons Why a Seller Would Consider Creative Financing (0:43)
• Start Reason # 1 (0:39)
• Start Reason # 2 (0:35)
• Start Reason # 3 (0:44)
• Start Reason # 4 (0:47)
• Start Most Important Mentality to Have When Structuring Creative Commercial Deals? (1:44)
• Start Example # 1 (1:10)
• Start Example # 2 (0:32)
• Start Example # 3 (0:59)
• Start Master Lease Agreement for Commercial Real Estate (2:30)
• Start How the Master Lease Agreement Works (1:16)
• Start Joe’s Deal (1:10)
• Start Two things you must do to land your first Master Lease (1:51)
• Start Seller Gets (0:35)
• Start Buyer gets (1:23)
• Start 3 Nuggets on YOU Doing a Successful Commercial Master Lease Deal (0:48)
• Start What Property/Seller is ideal for a Master Lease Deal? (10:50)
• Start Conclusion (1:31)
• Start What is Private Money? (1:31)
• Start 4 Reasons to Raise Private Money to Invest in Commercial Real Estate (1:40)
• Start Student Investors Takashi and Rae (2:16)
• Start Takashi and Rae's Deal (4:27)
• Start Why Invest with a Private Partner? (1:19)
• Start Managing Property With a Partner (1:05)
• Start Takashi and Rae's Tips: How to Choose a Private Partner (4:09)
• Start Future Commercial Real Estate Goals (1:48)
• Start Raising Private Money for Your Deals (4:06)
• Start Basics of Real Estate Syndication (2:18)
• Start What is Real Estate Syndication? (1:44)
• Start Why Syndicate? (2:27)
• Start The Four Most Important Things to Know When Raising Capital 1. It is a relationship-based business (0:44)
• Start The Four Most Important Things to Know When Raising Capital 2. Put the Investor First and Yourself Second (0:45)
• Start The Four Most Important Things to Know When Raising Capital 3. Your capital raising efforts need to be structured for efficiency and legal reasons (0:33)
• Start The Four Most Important Things to Know When Raising Capital 4. Get an attorney who’s experienced in real estate syndication (1:45)
• Start The Three Ways You Can Profit From Real Estate Syndication 1. Acquisition Fees (1:13)
• Start The Three Ways You Can Profit From Real Estate Syndication 2. Asset Management Fees (1:44)
• Start The Three Ways You Can Profit From Real Estate Syndication 3. Equity participation (2:03)
• Start How to Find Investors (4:37)
• Start How Many Investors Do You Need? (2:48)
• Start How to Convince Investors to Invest With You? (5:30)
• Start Top Three Questions Investors Will Ask (3:06)
• Start Real Deal Example (5:17)
• Start Apartment Loans Introduction (1:19)
• Start Part 1: Two Ways Apartment Loans differ from Residential Mortgages (2:36)
• Start Part 2: How to Qualify for an Apartment Loan (The 3 C's) (0:34)
• Start Part 2: The 3 C's: Cash Flow (1:10)
• Start Part 2: The 3 C's: Collateral (1:04)
• Start Part 2: The 3 C's: Credit (2:16)
• Start Part 3: What Apartment Lenders Like (1:43)
• Start Part 3: What Apartment Lenders Dislike (2:41)
• Start Part 4: Ten Step Apartment Loan Process (1:19)
• Start Part 4: Ten Step Apartment Loan Process - Phase 1 (1:57)
• Start Part 4: Ten Step Apartment Loan Process - Phase 2 (2:35)
• Start Part 5: Apartment Loans Available Today - Where do you go to get a loan? (1:20)
• Start Part 5: Apartment Loans Available Today - Fannie Mae and Freddie Mac Small Apartment Loan Program (5:03)
• Start How to Get a Commercial Hard Money Loan Introduction (4:05)
• Start What is Hard Money Loan? (3:55)
• Start Why is This a Great Commercial Real Estate Deal? (2:31)
• Start What Can You Do With This Money? (1:35)
• Start The Five Major Differences Between a Hard Money Lender and a Conventional Lender (2:43)
• Start The True Purpose of Hard Money Loans (0:54)
• Start The Three Most Common Hard Money Questions (3:44)
• Start How to Identify Fraudulent Hard Money Lenders (3:07)
• Start Commercial and Residential Hard Money Lender Database (0:47)
• Start Secrets to Refinancing Commercial Real Estate (0:23)
• Start Why Refinancing Commercial Real Estate? (1:04)
• Start What is Refinancing Commercial Real Estate Refinance and How Does it Differ From a Home Loan Refi? (2:06)
• Start Three Real Life Examples 1. Dave’s Story (4:06)
• Start Three Real Life Examples 2. Daryl's Story (3:05)
• Start Three Real Life Examples 3. Alan and Myra’s Story (3:24)
• Start In Summary: 1. You Can Use Refinancing Commercial Real Estate as a Tool (0:40)
• Start In Summary: 2. Look at Refis as a Way to Increase Cash Flow (0:45)
• Start In Summary: 3. Keep an Eye on When Your Loan Comes Due (1:07)
• Start Introduction: Debt-Free vs Investing Using Debt (0:24)
• Start Debt-Free Personal Finance Strategy Benefits (0:43)
• Start Going into Debt to Invest in Commercial Real Estate Benefits (1:38)
• Start Investment Strategy #1: Debt-Free Commercial Investing (1:29)
• Start Investment Strategy #2: Commercial Investing Using Debt (2:41)
• Start Choices You Can Make Because of Investing Using These Strategies (2:32)
• Start A Few Points Concerning Debt (2:57)
• Start Recommended Video: 5 Keys to Making Decisions in Commercial Real Estate (0:32)
• Start Why Aspiring Commercial Investors Fail (0:12)
• Start Advice From the Best (0:38)
• Start Failure 1: Missed Opportunities (1:35)
• Start Solution to Failure 1: People typically learn in one of three ways (1:13)
• Start Failure 2: Inability to Analyze a Property (1:34)
• Start Solution to Failure 2: Key Performance Indicators (0:43)
• Start Failure 3: The Inability to Analyze Your Market Effectively (2:13)
• Start Solution to Failure 3: Information Utilization (0:18)
• Start Failure 4: Poorly Designed Exit Strategies (1:34)
• Start Solution to Failure 4: Simple Strategies (0:09)
• Start Failure 5: : Not Being Knowledgeable Enough in Structuring Deals (3:36)
• Start Failure 6: Thinking Too Small (1:13)
• Start Failure 7: Quitting Before Even Starting (1:43)
• Start The 7 Main Reasons Why Aspiring Commercial Ivestors Fail (0:56)
• Start Buyer Beware! (1:26)
• Start 3 Ways Commercial Sellers Can Deceive You (3:29)
• Start Caveat Emptor: Commercial vs. Residential Real Estate (3:26)
• Start Protect Yourself from Caveat Emptor (1:35)
• Start What Could Go Wrong? (2:43)
• Start 1. Assemble an Experienced Team (3:17)
• Start 2. Plenty of Cash Reserves (3:11)
• Start 3. Have a Conservative Exit Strategy (5:25)
• Start 4. Long-term Loan (3:31)
• Start 5. Buy Property that Will Be in Demand (1:48)
• Start 6. Buy Existing Properties (2:27)
• Start Distinguishing Good Deals from Bad Deals in Commercial Real Estate (1:27)
• Start Example 1: Good Deal or Bad Deal? (1:01)
• Start Peter's Answer: Is Example 1 a Good or Bad Deal? (2:10)
• Start Example 2: Good Deal or Bad Deal? (0:55)
• Start Peter's Answer: Is Example 2 a Good or Bad Deal? (3:01)
• Start Example 3: Good Deal or Bad Deal? (0:56)
• Start Peter's Answer: Is Example 3 a Good Deal or Bad Deal? (1:25)
• Start Example 4: Good Deal or Bad Deal? (0:52)
• Start Peter's Answer: Is Example 4 a Good Deal or a Bad Deal? (0:20)
• Start The 4 M's (2:17)
• Start Tips on Distinguishing Good Deals From Bad Deals in Commercial Real Estate (1:35)
• Start How to Avoid Bad Commercial Real Estate Deals (1:36)
• Start What is Due Diligence? (1:53)
• Start Why Perform Due Diligence? (3:33)
• Start 7 Important Facts Before Starting Due Diligence (4:42)
• Start 7 Tips That Will Save You a Fortune (6:06)
• Start A Critically Important Due Diligence Formula (4:20)
• Start My Personal Due Diligence Checklists (3:46)
• Start Introduction: Let's Play Commercial Deal or NO Deal (1:05)
• Start Deal #1 (1:45)
• Start Deal #2 (1:31)
• Start Deal #3 (2:25)
• Start Deal #4 (2:14)
• Start Introduction (1:23)
• Start Walk Away if the Numbers Don't Work (5:44)
• Start Walk Away from a Shady Seller (5:02)
• Start Walk Away from Poor Demographics (3:52)
• Start Walk Away from Grade 4 Renovations (4:38)
• Start How Do You Get the REAL Numbers on Commercial Deals? (0:53)
• Start 3 Key Facts About Commercial Real Estate (2:24)
• Start Scenario #1: No Property Expenses (3:12)
• Start Scenario #2: No Price (3:36)
• Start Scenario #3: No Financial Records (4:18)
• Start Tactic #1 - Determine Your Take Price Before Making an Offer (3:17)
• Start Tactic #2 - Meet the Seller in Person When Negotiating (2:39)
• Start Tactic #3 - Encourage the Seller to Think They Are in Control (1:53)
• Start Review - 3 Persuasive Negotiating Tactics for Real Estate Investors (0:20)
• Start Using a Letter of Intent for Making Offers on Commercial Real Estate (1:03)
• Start Two Main Ways to Make Offers on a Property (0:19)
• Start Definition of a Letter of Intent (LOI) (0:26)
• Start The Three Main Purposes of the Letter of Intent and How to Use it Effectively (1:06)
• Start The LOI is Not (0:38)
• Start Three Advantages of Using LOIs (1:50)
• Start How to Make an Offer on Commercial Real Estate (2:15)
• Start The Four Phases of Making an Offer on Commercial Property
• Start The Four Phases of Making an Offer on Commercial Property Phase I: Broker Brochure (0:15)
• Start The Four Phases of Making an Offer on Commercial Property Phase 2: Seller Financials (0:14)
• Start The Four Phases of Making an Offer on Commercial Property Phase 3: Proforma (0:34)
• Start The Four Phases of Making an Offer on Commercial Property Phase 4: Your Numbers (0:36)
• Start 8 Essential Things You Need Before Making an Offer
• Start 1. Income (0:10)
• Start 2. Expenses (0:13)
• Start 3. NOI (0:23)
• Start 4. Mortgage (0:30)
• Start 5. Cashflow (0:03)
• Start 6. Cash and Cash Return (0:25)
• Start 7. Cap Rate (0:30)
• Start 8. Capital Expenses (0:32)
• Start How the 4 Phases Use These Commercial Real Estate Terms (0:18)
• Start Broker Brochure (1:05)
• Start Seller Financials (0:52)
• Start Proforma (Projected) (0:48)
• Start Your Offer (1:23)
• Start Your Goals When Making an Offer (4:32)
• Start The End Result (0:30)
• Start BONUS (0:38)
• Start Why, What, How? (0:58)
• Start 3 Tips to Get Commercial Sellers to Say YES to Your Offer (0:51)
• Start Tip 1: 2 Keys when working with sellers (5:18)
• Start Tip 2: 3 Really Important Questions (1:42)
• Start Tip 3: Knowing what to do with the answers (5:46)
• Start Summary of the 3 Tips (1:14)
• Start Distressed vs Stabilized Property: Pros and Cons (2:18)
• Start 6 Tips for Buying Distressed Commercial Real Estate (3:37)
• Start 6 Tips for Buying Stabilized Commercial Real Estate (4:41)
• Start How to Buy Distressed Commercial Real Estate (1:54)
• Start Distressed Properties and Student Deal Examples (4:53)
• Start What is a Distressed Commercial Property? (0:29)
• Start 1. Physically (0:22)
• Start 2. Financially (0:40)
• Start 3. Legal (0:19)
• Start In Every Crisis Lies the Seed of Opportunity (1:26)
• Start When Does it Make Sense to Buy a Distressed Commercial Property? (5:33)
• Start How to Find Distressed Commercial Real Estate? (3:28)
• Start How to Finance Distressed Commercial Property (0:22)
• Start How to Finance Distressed Property Conventionally (1:54)
• Start How to Finance Distressed Property Creatively (2:45)
• Start Exit Strategies for Distressed Commercial Properties (4:41)
• Start Intoduction - Adding Value 101 (2:42)
• Start What is Value Add Commercial Real Estate (4:06)
• Start How to Evaluate a Value Add Comercial Deal (6:00)
• Start How to Find Value Add Commercial Deals (3:29)
• Start Roadmap to Making Big Bucks With Value Add Commercial Real Estate (2:45)
• Start Conclusion - How Chris Became a Millionaire in One Year (1:00)
• Start 7 Tips When Buying Commercial Real Estate Long Distance (1:34)
• Start Tip 1: Understand Why Buying CRE Out of State is so Attractive (3:12)
• Start Tip 2: Never Buy a Property You Have Not Seen (2:34)
• Start Tip 3: Alternatives to Purchasing Commercial Real Estate (2:46)
• Start Tip 4: You Need Guiding Principles (4:13)
• Start Tip 5: Buy a Commercial Property That is Big Enough (3:14)
• Start Tip 6: Have Realistic Underwriting and Expert-Level Due Diligence (5:10)
• Start Tip 7: Don’t Invest Beyond Your Knowledge (2:44)
• Start Can Beginners Make Money Wholesaling Commercial Real Estate? (2:05)
• Start Why Wholesale Commercial Real Estate? (0:47)
• Start How to Make Money Wholesaling As a Beginner (1:13)
• Start 3 Steps to Wholesaling Commercial Property (6:36)
• Start The Ideal Commercial Wholesale Deal (2:27)
• Start Getting Started as a Beginner Wholesaler (1:58)
• Start Part 1 - What is a Triple Net Lease (3:17)
• Start Part 2 - Pros and Cons of NNN Leases (4:42)
• Start Part 3 - Who Should Do a Triple Net Lease (3:06)
• Start Tax Benefits of Commercial Real Estate (2:22)
• Start Commercial Real Estate Advantages (0:48)
• Start Quick Disclaimer (0:27)
• Start Find Your Category (4:38)
• Start Person 1 (1:03)
• Start Person 2 (1:53)
• Start Person 3 (2:32)
• Start Real Life Example (4:38)
• Start Today’s Three Takeaways (1:26)
• Start #1 Reason to Invest in Rural Commercial Real Estate (1:13)
• Start Rural Commercial Real Estate Case Study (3:53)
• Start Meet Farmer Ray (3:53)
• Start Ray's Rural Commercial Real Estate Deal (1:58)
• Start Creative Solutions (2:10)
• Start Creative Financing (2:39)
• Start Challenges of Rural Commercial Investing (3:06)
• Start Ray's Tips for Beginner Commercial Investors (2:25)
• Start Ray's Plans for the Future (2:24)
• Start #1 Pitfall of Rural Commercial Real Estate Investing (1:46)
• Start 3 Things to Know in Your Submarket (1:59)
• Start Choosing the Right Commercial Real Estate Broker (1:37)
• Start What You Will Learn in This Blog (0:54)
• Start Two Things I Learned About Commercial Real Estate Agents (19:26)
• Start 1. They are regular people (0:39)
• Start 2. There’s a big difference between commercial real estate agents and residential real estate agents (1:22)
• Start What You Want From Commercial Real Estate Brokers (2:00)
• Start How to Choose a Commercial Real Estate Broker (2:32)
• Start The 5 Qualifications You Need From a Commercial Real Estate Broker (2:00)
• Start How to Start Working With a Commercial Real Estate Broker (3:20)
• Start Why Would a Commercial Real Estate Broker Choose to Work With You (2:13)
• Start Two No-Nos When Working With Commercial Real Estate Brokers (1:31)
• Start Conclusion (0:22)
• Start Commercial Real Estate News You Can Use (1:25)
• Start 1. National Perspective (0:35)
• Start 2. Asset Type Perspective (0:51)
• Start 3. Brokerage Perspective (1:06)
• Start 4. Local Economy Perspective (1:34)
• Start 5. Lender Perspective (0:39)
• Start A Well Informed Commercial Real Estate Investor (0:43)
• Start Doors to Exit the Rat Race (1:22)
• Start ABC's of Exiting the Rat Race (2:46)
• Start The Missing Piece (0:30)
• Start Commercial Property Advisors (0:33)
• Start How to Calculate Your Rat Race Exit Number? (0:52)
• Start The Big Question (0:49)
• Start How to Calculate How Many Doors You Need to Exit the Rate Race? (5:04)
• Start Your Personal Door Number (2:17)
• Start What I Did to Exit the Rat Race (3:46)
• Start What You Must Do to Exit the Rat Race (3:13)
• Start Myth #1: You MUST Find a Bargain Deal (4:01)
• Start Myth #2: Don't Go Into Debt (3:43)
• Start Myth #3: There's Always a Loser in a Commercial Transaction (3:34)
• Start 3 Life Lessons From My Dad (1:29)
• Start Lesson #1: Not Starting as Soon as Possible (2:24)
• Start Lesson #2: Being Cheap is Expensive (3:53)
• Start Lesson #3: Letting Pride Get in the Way of Success (3:00)
• Start How Bad Do You Want It? (1:15)
• Start Key #1: No Decision is the Worst Decision (1:48)
• Start Key #2: Exercise Your Decision Making Muscle (2:37)
• Start Key #3: The 40/70 Decision Making Rule (3:10)
• Start Key #4: Know Your Why (2:18)
• Start Key #5: Make Decisions Quickly, Change Them Slowly (3:10)
• Start Introduction: Goals as a Beginner Investor (2:18)
• Start #1: National Experience (2:43)
• Start #2: Gray Hairs (1:19)
• Start #3: Proven Teacher (2:05)
• Start #4: Mentor with Tools and Resources (0:53)
• Start #5: A Mentor who is Financially Incentivized (2:10)
• Start Conclusion: Become My Next Protege (1:04)
• Start Conclusion (2:19)

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Real estate investment and development, gain an introduction to the real estate market with our online short course.

Analyze the commercial viability of real estate investments and developments with this online short course.

Upcoming start dates

• September 11, 2024
• February 26, 2025
• May 28, 2025
• September 10, 2025

8 weeks, excluding orientation

7-10 hours per week, self-paced learning online, despite the economic turbulence of the past decade, the real estate industry in the us has only gone from strength to strength in recent years. in this online short course from rice university’s jones graduate school of business, gain an introduction to the current commercial real estate and development market. by examining the real estate ecosystem from a holistic perspective, you’ll unpack the fundamental skills necessary to facilitate informed commercial real estate investment and development decisions., over the course of eight weeks, you’ll explore the concepts and techniques used to analyze commercial real estate assets, and the instruments commonly used to finance these assets. you’ll also learn to personally analyze and identify commercially viable real estate for development..

Who Should Attend

• Real estate developers and entrepreneurs who want to identify and analyze the viability of real estate investments and developments
• Real estate agents, brokers and property managers who want to deepen their knowledge of the commercial real estate ecosystem
• Finance professionals wanting to gain a holistic understanding of the specific financial tools and techniques required to assess the feasibility of an investment

Program Takeaways

• The ability to identify and analyze the commercial viability of real estate investments and developments
• An understanding of the commercial real estate ecosystem as a whole
• Knowledge of the financial tools and techniques required to assess the feasibility of an investment

Course Curriculum

Unpack the concepts that inform commercial real estate investment and development decisions as you work through the weekly modules of this online short course.

Orientation Module: Welcome to your Online Campus Module 1: The logic behind real estate investment decisions Module 2: The factors affecting real estate value Module 3: The real estate system and the developer Module 4: Property level evaluation Module 5: Leverage and the impact on risk and return Module 6: Economic feasibility of a development project Module 7: Equity partners Module 8: Making investment decisions

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Jefferson Duarte

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Real Estate Investments: Assets, Markets, and Current Trends, 2-day Session

Master the fundamentals and practicalities of real estate investing.

Overview of Our Real Estate Investment Course

Valued at more than $230 trillion, real estate investments are the world’s largest asset class and one of the most entrepreneurial fields. Because of its size, real estate investing offers a broad variety of opportunities to enter, explore, and grow within the industry.

This highly interactive real estate investing course will immerse participants in the fundamental characteristics of real estate assets and entrepreneurship. You will learn the nuts and bolts of real estate investment and finance, practice conducting real estate market analysis, develop high-level investment strategies, and explore strategies to raise capital.

This program will prepare you to identify critical current trends in real estate markets and to seize upon transformative opportunities emerging in the real estate industry.

Who Should Register For Real Estate Investments?

This real estate investing course is designed for those who are getting their start in real estate entrepreneurship or those who are already in the field and are interested in accelerating their investment careers.

The course will give you practical, hands-on experience to expand your knowledge on a variety of topics within real estate investment, from creating financial models to measuring returns on investments.

Benefits of Our Real Estate Investment Course

This training program will provide you with a robust and thorough outlook on the current state of real estate investment. The material will cover how to:

• Master the real estate investment landscape: the properties, the players, and the markets.
• Identify key market segments and develop investment strategies.
• Perform financial analysis of investment properties and learn about financial partnerships for raising capital through syndication and private equity models.
• Explore innovations in real estate including Single Family Home (SFH) investing, PropTech, and the rise of autonomous vehicles.
• Discover how artificial intelligence and machine learning are revolutionizing cities and real estate markets.
• Earn a Certificate of Participation from the Harvard Division of Continuing Education.

Our real estate investment course aims to provide participants with the knowledge and skills to succeed in the field. The curriculum centers on:

• Key market segments and real estate investment strategies
• The real estate market cycle
• Financial analysis of property investments including taxation of real estate income
• Market analysis, such as forecasting changes in supply and demand
• Raising capital via joint ventures and financial partnerships
• Recent innovations, including artificial intelligence, PropTech, autonomous vehicles, and more

These topics will prepare participants to master the fundamentals and practicalities of real estate investing.

The cost for a two-day, on-campus program is $2,990.

Considering this program?

Send yourself the details.

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What Will This Real Estate Investment Course Teach?

This real estate investment course will teach participants the essentials of the industry, how to anticipate important trends, and how to perform relevant financial analysis. It will go over the fundamentals of real estate investment such as properties, capital markets, important industry players, and the external factors that influence the field.

How Long Does Real Estate Investments: Assets, Markets, and Current Trends Last?

This course runs for two consecutive days.

How Will Taking a Real Estate Investment Course Help Me in My Career?

Professional development is an important aspect of continuing your career growth and striving to reach your goals. This real estate investment course will help to keep your skills sharp while learning new ones. It also offers the opportunity to network with other real estate entrepreneurs. Additionally, a well-qualified employee attracts employer attention and can boost your earning potential.

This course will improve your knowledge in making decisions, mitigating risks, and improving the performance of your portfolio.

Read our blog post for more information on how a professional development program like this one can benefit you.

What Skills or Experience Is Needed Before Taking This Real Estate Investing Class?

This course is for those who are interested in learning the fundamentals of real estate investment, as well as for those who are already in the industry and want to keep their skills up to date. Participants seeking to transition from peripheral involvement into direct real estate investment will gain an enriched perspective from this course as it covers both the basics and more in-depth knowledge.

Harvard Division of Continuing Education

The Division of Continuing Education (DCE) at Harvard University is dedicated to bringing rigorous academics and innovative teaching capabilities to those seeking to improve their lives through education. We make Harvard education accessible to lifelong learners from high school to retirement.

Assessing Commercial Real Estate Investments and Markets

Program overview.

Real estate surrounds us, but as an asset class, it is one of the least understood. Today, as investors navigate higher interest rates, uncertain economic growth, a rapidly-evolving future for some sectors such as offices, an upending of interest in some urban areas, and diverging global circumstances, it is essential to become knowledgeable and develop greater confidence about the nuances of real estate investing. Real estate investment continues to offer some outstanding opportunities, even as significant changes reshape the industry.

Assessing Commercial Real Estate Investments and Markets is for investment professionals and individual investors who want to make informed decisions in both the short and long term. This program will help you better understand the forces that are at play, eliminate fear, and give you deep insights into analyzing the risks and rewards that are emerging as demand for commercial real estate expands or contracts in various sectors.

Assessing Commercial Real Estate Investments and Markets provides an excellent overview for institutional investors, says Academic Director Todd Sinai.

Date, Location, & Fees

If you are unable to access the application form, please email Client Relations at [email protected] .

December 10 – 13, 2024 Philadelphia, PA $10,250

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Program Experience

Who should attend, testimonials, highlights and key outcomes.

In Assessing Commercial Real Estate Investments and Markets , you will:

• Learn about various sectors of commercial real estate and the different options for investing in them
• Analyze how to navigate the short- and long-term trends and the evolution of the commercial real estate industry
• Understand how to balance risk and return in a sector impacted by macro-economic forces such as inflation and recessions
• Gain clarity and confidence around evaluating potential real estate investment partners and opportunities
• Explore the drivers of real estate markets and discover how to invest and manage risk globally
• Determine how best to fit real estate into an overall investment strategy

Risks and Pitfalls: This program explores some of the risks of investing in real estate.

Experience and Impact

The commercial real estate landscape has fundamentally changed. What was once prized — such as the familiar “location, location, location” — may be a liability tomorrow. Continued shifts in how and where people prefer to work and interact, along with economic forces including inflation and recessions, are causing major fluctuations in demand and pricing. They may also cause investors to avoid the asset class entirely.

Unlike other industries that can retool a manufacturing line or discontinue a product or service, commercial real estate cannot pivot or revamp its business model quickly. That means real estate investors must be highly attuned and aware of these shifts, nimble and ready to change course in order to capture returns.

Assessing Commercial Real Estate Investments and Markets is led by faculty from Wharton’s top-ranked real estate department and the world’s premier real estate education and research center. Highly engaging sessions that include interactive exercises, case studies, and small-group breakouts explore the fundamental concepts and nuances of commercial real estate. Participants investigate many real estate investment strategies, including direct investment, investing in public equity, lending to real estate, investing in real estate debt, and investing in a company or private equity firm that is itself investing in real estate.

This program is particularly relevant for institutional investors and financial advisors to high-net-worth clients. Participants will become more assured, discerning evaluators of potential investments in the U.S. and globally, and learn how to diversify investments across countries, find local partners, and assess and hedge currency risks.

You will leave with a deeper understanding of the concepts, terminology, strategies, and opportunities that will enable you to confidently add both domestic and global real estate to your investment portfolio.

Global Perspective: Learn what to look for when investing globally.

Wharton LIVE Online Programming

Real-time peer learning with deep faculty engagement and global networking

Program Duration:

Building Your Network

• Wharton After Hours Wharton faculty will lead an online discussion board that moves beyond the day’s content into global current events. Think of it as faculty office hours but online.
• Real Estate Growth, Booms, and Risk: What Has Happened and What Can We Expect?
• Cash Flow, Cap Rates, and Property Investment
• Liquidity and Capital Structures in Times of Stress
• Navigating Passive Real Estate Investing: REITS, Private Equity, Bonds, and Debt
• Portfolio Allocation to Real Estate: Risks, Returns, Opportunities, and Downsides
• Property Investing: How to Make Money and Avoid Going Broke, and Why Great Leadership Matters
• Global Real Estate: Debt and Equity Markets
• Real Estate as a Hedge Against Inflation: Separating the Signal from the Noise

Listen to Faculty Interview:

Professor Todd Sinai talks about Assessing Commercial Real Estate Investments and Markets in this interview on Wharton Business Radio, SiriusXM.

Convince Your Supervisor

Here’s a justification letter you can edit and send to your supervisor to help you make the case for attending this Wharton program.

Due to our application review period, applications submitted after 12:00 p.m. ET on Friday for programs beginning the following Monday may not be processed in time to grant admission. Applicants will be contacted by a member of our Client Relations Team to discuss options for future programs and dates.

Professor Todd Sinai on the classroom experience.

This program is designed for those who invest large amounts of capital, such as institutional investors and financial advisors, who do not have a background specifically in real estate but who need to acquire or enhance their understanding of the sector or need a refresher on emerging real estate trends. This program is not for commercial real estate brokers, real estate developers, or other professionals whose primary focus is on the acquisition, construction, financing, or selling of commercial real estate.

Ideally, participants should already have a grasp of concepts such as net present value (NPV), internal rate of return (IRR), free cash flow, discounted cash flow analysis, return on investment, and cost of capital. Familiarity with Microsoft Excel is expected.

Some of the job functions and roles include:

• Asset managers and chief investment officers for large publicly traded or privately held corporations and institutions such as pension funds, university endowments, and foundations
• Sovereign wealth fund professionals
• Family office representatives and other private wealth advisors to ultra-high-net-worth individuals and families
• CPAs, attorneys, and other professionals who advise institutional investors

Additionally, this program provides an excellent learning opportunity for ultra-high-net-worth investors who are frequently pitched commercial real estate investment deals and wish to be better educated in the subject.

Fluency in English, written and spoken, is required for participation in Wharton Executive Education programs.

Group Enrollment

To further leverage the value and impact of this program, we encourage companies to send cross-functional teams of executives to Wharton. We offer group-enrollment benefits to companies sending four or more participants.

Todd Sinai, PhD See Faculty Bio

Academic Director

David B. Ford Professor; Professor of Real Estate; Professor of Business Economics and Public Policy; Chairperson, Real Estate Department, The Wharton School

Research Interests: Commercial real estate and real estate investment trusts, real estate and public economics, risk and pricing in housing markets, taxation of real estate and capital gains

Joseph Gyourko, PhD See Faculty Bio

Martin Bucksbaum Professor; Professor of Real Estate; Professor of Finance; Professor of Business Economics & Public Policy; Nancy A. Nasher and David Haemisegger Director of the Zell/Lurie Real Estate Center, The Wharton School

Research Interests: Housing markets, real estate finance, and real estate economics

Asuka Nakahara, MBA See Faculty Bio

Practice Professor of Real Estate; Associate Director of the Zell/Lurie Real Estate Center, The Wharton School

Maisy Wong, PhD See Faculty Bio

James T. Riady Associate Professor of Real Estate; Assistant Director, Grayken Program in International Real Estate, Zell/Lurie Real Estate Center, The Wharton School

Research Interests: Development economics, real estate economics, urban economics

As an institutional investor and allocator, I attended Assessing Commercial Real Estate Investments and Markets to gain insight into this important asset class and to address the complexities introduced by current events. Real estate is an enduring need that must be satisfied. Change, particularly events impacting the real estate market, creates opportunity to seek out and identify new real estate needs that can be profitable investments. Change also creates risks as opportunities from an earlier era lose their relevancy. In some sense real estate has become a better opportunity given recent events and trends but also is facing sizable risks to existing investments. There are many aspects of the course I appreciated and from which I gained value. The faculty are exceptional, and the fellow students are all serious and experienced professionals. I particularly enjoyed interacting with the class to discuss various case studies of real estate investment opportunities and very much valued the panel of industry experts discussing their real estate investment strategies and current market events. Todd Sinai provided an excellent fundamental understanding of real estate, some great case studies, and a discussion of risks. Joseph Gyourko provided an interesting discussion of the impact of COVID-19. Asuka Nakahara generated an excitement for the opportunity of investing in real estate and made the market come to life with case studies. Maisy Wong provided an excellent, well organized discussion of global real estate investment. Overall, the course provided me a deeper understanding of the opportunity and risks of investing in real estate as well as how to access real estate returns. I can now better allocate capital to real estate by understanding how that capital should be deployed among sectors, geographies, and instruments as well as how to manage the risks of that investment. There is no doubt I will recommend this course as well as the other Wharton Executive Education offerings to investment professionals. Also, I have made a commitment to complete the excellent and professionally enriching Advanced Finance Program ."

Scott Anderson  CFA, Institutional Investment Management Executive

I would recommend this program to people who are not yet in the real estate investment industry but are wondering how COVID-19 would impact their investment portfolios, as well as people who are already in the investment industry but want to capture any potential opportunities arising post COVID-19."

JM Yun  Senior Associate, Watson Farley & Williams

Getting to know and learn from my professors and peers and hearing their perspectives and opinions as well as honing and sharpening my real estate investment skills and putting myself in the seat of the investment manager was extremely important."

Julia Davis  Principal/Founder, Maslin Advisors

The Assessing Commercial Real Estate Investments and Markets program was timely and just right for me to learn more about this alternative asset class. We were in the midst of developing a product program for the launch of our real estate fund, and this program was perfect to help us complete our product launch. We needed to go deeply into the many real estate investment strategies such as lending, direct investments, public equities, etc. and to better grasp the advantages and drawbacks of each. Attending the program provided us with the necessary tools, concepts, and strategies. We’ve gained clarity and confidence prior to rolling out our real estate fund. I returned to my organization with the critical insights and frameworks to structure our funds for the long run. I also came out of the program equipped with new strategies to enhance operational efficiencies, to create value through improvements in operations, and to analyze a pro forma. I gained a better understanding of how critical the capital structure is in real estate, and to slice and dice the capital stack. The session on what investors look at when going to countries outside of their home country was particularly valuable to me: understanding macro factors that make investors jittery such as a country’s foreign debt, foreign currency reserves, current account, and other factors. Moreover, the sessions on the changing face of real estate in cities, private equity investing, and property investing were all highly insightful and of immense value. The high caliber of both the faculty and the participants contributed much to the learning experience. The faculty’s broad range of expertise enabled them to take academic lessons and apply them to the real world. My peers were experienced and knowledgeable, which enhanced the interaction inside as well as outside the classroom."

Jorge Quintanilla  CEO, Capital Safi, La Paz, Bolivia

My company provides analytics for clients on the buy side and sell side of Wall Street. We deal with the analysis of securitized products, which have a number of different underlying products including commercial mortgage-backed securities. So in that respect we deal with real estate. The program was terrific and really well structured. It covered all aspects of assessing and analyzing real estate investments. You gain an understanding of the risks and other aspects of real estate investment whether domestic or international. The lead professor, Todd Sinai, explained in detail about commercial real estate, real estate investment trusts, risk and pricing in housing markets, and taxation. I really enjoyed Asuka Nakahara’s discussion of how to analyze real estate as a regular individual, whether it’s buying a home or investing as a general partner into apartments, for example. Another big takeaway for me was pro forma modeling and analyzing: we looked at a number of scenarios — different economic conditions — and modeled how a real estate investment would perform. Also among my most valuable takeaways was an understanding of the risks and regulations involved in global investment. Maisy Wong brought us the global perspective, which was really an eye-opener for people who were not aware of some of the considerations of investing in other countries. Another important learning I acquired was how to identify an impending real estate crash. I appreciate having that perspective now. I have already adopted some of the techniques from the program in my everyday work. For a couple of clients for whom I’m analyzing their investments, I have been able to identify risk factor scenarios and risk analysis of various traded instruments. And I have a fuller understanding of the different factors that affect the risk analysis of the products my company buys and sells. Assessing Commercial Real Estate Investments and Markets was a very good program for anyone who wants to use real estate as an investment vehicle. I recommend it highly.”

Sanjay Rajaram  President, ImagineSys Inc., Princeton, New Jersey

I am an angel investor, helping communities set up businesses. I help them with funds, advisory services, and business development. I own some real estate properties in Canada, the U.S., and China — that’s another part of my business — and for quite some time I’ve been wanting to get more involved in the real estate industry. Assessing Commercial Real Estate Investments and Markets was an excellent program and was exactly what I was looking for. It helped me in many different areas. I am trying to extend my investments from residential to commercial, and it really helped me understand the big picture of the commercial real estate market. I appreciated learning more about different sectors such as apartment buildings, retail, and industrial. Another important area for me was ROI and risk analysis. I gained more insight into business ROI so I can measure and quantify my investments in more detail. While I have used traditional risk analysis tools in this space, the course expanded my vision into using other valuable tools. The professors, along with many of my classmates, provided me with a better understanding of market trends. This helped me define my next step in real estate investing. The program had a big impact on my business plan: I immediately changed my investment portfolio, and I purchased some REITs. Even when the stock market dropped recently, my REITs did pretty well. I have also decided to move some of my Canadian apartment building investments to the U.S., which is important to my plan. Todd Sinai was a great course leader. Professors like him and Joseph Gyourko not only have plenty of knowledge and theory in this space, but they are successful and experienced in real estate themselves. The program was very practical and real world.”

Jacky Chen  Investor and Business Advisor, York Angel Investors, Toronto, Canada

I am a professor of biostatistics and bioinformatics, so my professional job has no direct relationship with real estate. But I wanted to attend Assessing Commercial Real Estate Investments and Markets to understand the principles of real estate investment. I learned a lot from the program. It conveyed important information such as how to focus on the risk first, and how to use different techniques to project the profits and returns. The faculty were terrific. There is a reason these individuals get to teach at Wharton! The academic director, Todd Sinai, was very knowledgeable and friendly. He did a great job of bringing together all these excellent professors and selecting topics that covered every major area of real estate investing. The most interesting parts of the course for me were the talks by Maisy Wong, who discussed international real estate investment. That really helped me open my mind and gave me a very good, real sense of how to do global investment. The concepts, knowledge, and skills taught in this course go beyond real estate to other investment areas, such as how to foresee and control risk, how to assess an offer and the return, and how to develop personal relationships in order to improve your investments. The most important part of the program for me was it emphasized that in the end, it’s all about the people: your partners, clients, and contractors. On a 1-10 scale I would give this program a 9. I want to congratulate Wharton for offering such a wonderful course.”

Song Liu, PhD  Director of Bioinformatics, Roswell Park Comprehensive Cancer Center, Buffalo, New York

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Future of Work

Commercial real estate preps for the workplace of the future

Betsy Vereckey

Aug 5, 2024

It’s been four years since COVID-19 began emptying office buildings worldwide, and the commercial real estate sector is still feeling the fallout. Higher interest rates, waning demand for office space, and empty, difficult-to-convert office towers are among the challenges the market faces. 

Those same trends present an opportunity for the sector to adapt to how people want to live and work today. 

At the  2024 MIT World Real Estate Forum in June, industry experts offered their perspectives on the sector’s opportunities and roadblocks. They suggested ways that commercial real estate could be reimagined to provide more flexibility — encompassing everything from shorter lease terms to office spaces designed with the help of artificial intelligence. 

“People went home four-plus years ago; many of them never came back. Those that [did] are showing us that they want completely different things,” said  Dror Poleg , an economic historian and author of the 2019 book “Rethinking Real Estate.” 

“The restaurants are full, the hotels are full, the venues are full. Just the offices seem to have a problem, and housing seems to have a problem in terms of accommodating people where they actually want to be,” Poleg said. 

Amid an environment where  about a fifth of U.S. office space remains empty and commercial real estate  prices overall have tumbled by 11% since March 2022, the panel — moderated by  James Scott , director of the MIT Real Estate Transformation Lab — looked for bright spots. 

1. Mixed-use buildings are thriving.

One big challenge is that the office buildings of the past are not fit for the future, said  Benjamin Breslau , chief research officer at Jones Lang LaSalle, a provider of real estate and investment management services.

“There are probably too many of them, and some percentage, we’ll find out, are somewhat obsolete, either from a modernization, sustainability, technology, or a location perspective,” Breslau said. “Those things are hard to change, especially in a world where the cost of capital is high and capital is not looking to flow into office buildings.”

Conversely, mixed-use commercial real estate — which combines commercial and residential — is thriving in areas such as Newbury Street in Boston’s Back Bay, a formerly residential area where there’s more structural flexibility than, say, in an area with multiple office towers. 

“A lot of our clients are telling us right now they have offices in the right cities but in the wrong neighborhoods,” said Breslau.

He predicted that more people will want to work and live somewhere that feels like a community and said that mixed-use environments can help achieve this.

With sustainability a priority for many companies these days, mixed-use buildings are being touted for their ability to help the environment by reducing commute times. However,  Jinhua Zhao , professor of cities and transportation at MIT, said that it’s important to consider how the hybrid mindset can contribute to carbon emissions as it relates to the buildings themselves. In a “work everywhere, anytime” environment, electricity is usually on both at home and in the office, whereas before and during the pandemic, it was mostly one or the other. 

“People love flexibility, but we have a huge price to pay for it,” Zhao said. 

2. Artificial intelligence will alter the office market. 

AI is poised to replace or dramatically alter the need for buildings full of office and administrative support workers — “the office full of insurance claim processors in Tampa [or] lower-cost places where labor is more abundant and less competitive,” Breslau said. 

On the upside, “I think you’re going to end up with a much more creative envelope for the in-person work that is done in those offices,” Breslau said. Whether people gather to solve problems or innovate, “you could see a place in the future where the only office that’s left is the creative office, where people are doing more human things.” 

Breslau said he expects AI to play a leading role in  designing office spaces where humans can gather, be creative, and solve problems. For example, AI can be used to help design an office space with a layout that can enhance collaboration.

“AI should help us with this: How do you think about creating within a building, and within a neighborhood, the pockets of spaces, experiences, technology, and collections of people that enable people to do their best work?” Breslau said. 

3. Restrictive zoning rules are hindering innovation.

Zoning rules at the city level stifle development for both residential and commercial real estate, making it hard for businesses to expand and adapt to changes in the market, Poleg said. 

He suggested that cities should loosen their zoning rules so that developers can build what the community wants, including the ability to offer businesses shorter-term leases on office space.  

Poleg also said there is still demand for the co-living and co-working building model attempted by WeWork but noted that “it’s almost impossible to make money providing that type of product” right now. 

“One of the reasons that it’s hard to make money from it is that both our building codes and the whole financing ecosystem just cannot accommodate these things,” Poleg said. Whether it’s too expensive or takes too long to create, “we need to figure out how to accommodate that flexibility, because this is what our economy needs,” he said. 

4. Omnichannel retail remains a challenge. 

Related articles.

While office vacancies are struggling, retail is thriving. Only 4.7% of retail space is currently available for lease, the lowest level ever recorded, according to the National Association of Realtors.  

During the pandemic,  many omnichannel retailers did well as businesses beefed up their online operations, but “this is now starting to come back to bite some of them in a certain way,” Breslau said. Omnichannel isn’t just about improving the digital experience; it’s also about satisfying customers in brick-and-mortar locations — something that is proving to be a challenge for some businesses.

“If you go into a Starbucks these days, and you’re trying to enjoy the experience in the Starbucks, and you have the mobile orders and the in-person [orders] — it’s total chaos now,” Breslau said. “This blending of digital and physical, of remote and in person, of productivity and also experience are things that I think will take some time to play out.”

5. The office of the future is more a network than a place. 

Looking to the future, Breslau predicted that the world of work is going to be much more dynamic. “I do think, still, there will be quite a bit of work that can or should be done in person together, and that’s using the term ‘work’ broadly,” he said.

Along those lines, Poleg said he believes that the offices that will be successful are the ones that echo what WeWork’s overarching goal was: to have a branded network that gives people the freedom to book whatever they need (such as a full office or a desk) and access whatever they need as their business or job demands it. 

“I think this is the office of the future,” Poleg said. “The story here is not about whether you’ll work from your bed or work in an office. The story is that work is getting distributed [and is] popping up in all sorts of places closer to people’s homes — in new types of towns, different parts of the city, and in different types of buildings.”

Read next: How AI really changes the way we work

More From Forbes

How to maximize investment returns in commercial real estate.

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Matias Recchia is Co-Founder and CEO of Keyway , the AI- powered real estate investment manager.

In commercial real estate, investors monitor multiple financial metrics to assess the quality of an investment, such as capitalization rates, internal rates of return and cash-on-cash returns. These financial metrics are used to acquire, exit and value commercial real estate assets and measure their success. Investors want to maximize valuation upon the sale of an asset, but they’re not always sure how to drive investment returns through financial, strategic and technological enhancements.

Now, with the proliferation of artificial intelligence and machine learning, investors can automate manual tasks, aggregate public data and make data-driven decisions quickly and with fewer resources. This is something I've seen firsthand through my own company, which provides AI tools for real estate teams and investors. Let’s explore how investors can maximize their net operating income (NOI) in commercial real estate to increase the value of their underlying assets—and what they should know if they plan to use AI to help.

1. Strategic Acquisition

Location, location, location.

Choosing the right location is pivotal in real estate investment. High-demand areas with economic stability and rent growth, proximity to key amenities, transportation, central business districts and good schools are important to most buyers and tenants. Locating properties in these areas can help establish a foundation to drive valuations and rent yields higher. Investors should conduct market research to help identify neighborhoods and properties that have the potential for growth.

2. Financial Levers

NOI is a financial metric, so, naturally, pulling financial levers is one of the best ways to drive NOI. Before agreeing to acquire a commercial real estate property, conducting detailed financial due diligence is critical. This includes reviewing financial statements, scrubbing cash flow, calculating debt service coverage ratios and assessing cap rates. Investors should also consider potential economic shifts that could impact rent and property value, including interest rates and inflation.

While financial due diligence can mitigate risk before acquiring a property, ongoing financial analysis is also essential to drive profitability. Once you own a property, implement strict financial controls to stabilize and improve NOI. Review each line item of operating expenses, make energy-efficient upgrades and rightsize staff and service contracts. I also recommend evaluating current rent, assessing rent increases and evaluating other on-property revenue enhancement opportunities, such as parking, that could increase profitability.

3. Property Upgrades

Improving the condition of the property and optimizing space usage are two smart ways to help increase NOI. For example, investors can yield a higher NOI through direct physical improvements on the property. This can lead to higher rents, increased tenant satisfaction and lower turnover. What are some high-impact improvements? Consider updating the facade and signage, improving landscaping, offering modern and smart appliances, and modernizing common areas.

4. Risk Control

Protecting your commercial real estate investment is as important as operating your assets. You have to protect the value of your property from a legal and risk perspective. Conduct a deep legal review to ensure the property complies with all local ordinances, laws and codes. This includes the physical building; environmental, social and governance pursuits; and understanding how modifications might impact legal requirements.

Also, NOI can be adversely impacted if you don’t have robust risk management strategies in place. Consider whether your insurance protects against unforeseen losses, and regularly conduct compliance audits to ensure your property meets all regulatory requirements.

5. Exit Strategies

Investors often think about an exit prior to an acquisition. It’s never too early to start thinking about a potential sale of your commercial real estate asset. The foundational improvements you establish early can set the stage for NOI improvement over time, which ultimately will drive your exit valuation upon sale. While it’s challenging to time the market, investors can monitor local market trends with real-time data analytics.

Leveraging AI To Help

Simply put, if you want to use AI as a commercial real estate investor, you need an AI strategy. How are you using AI to acquire and manage properties? While pen and paper or spreadsheets might still be used by some investors, I believe the future is gravitating toward AI. Generative AI and machine learning can help investors with many of the tasks I've outlined above, including forecasting local market conditions; pricing rent based on property, neighborhood and broader market dynamics; reviewing and managing contracts and more.

However, commercial real estate companies and operators who are considering AI for their business should be aware of several key challenges. First, real estate data can be fragmented and incomplete. Therefore, ensure your data is clean and organized before relying on its outputs.

Second, test your AI analyses alongside traditional analytical methods to ensure your results are accurate. If there is a discrepancy, assess your AI solution, the underlying data or both.

Third, when choosing an AI solution, ensure the solution integrates seamlessly with your existing data sources and current platform. If you are using, or plan to use, an outsourced AI vendor, you should also ensure the AI vendor provides robust and comprehensive training and support. Your real estate team will only be able to leverage the AI solution seamlessly when they understand its comprehensive features.

Maximizing NOI in commercial real estate is not solely financial and managerial; shrewd investors can also leverage technology to gain a competitive edge. By adopting these strategies, investors can enhance the profitability and value of their real estate assets and maximize NOI—even in a competitive market.

The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.

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Real estate market in Russia - statistics & facts

Residential real estate, office market in moscow, investment in real estate, key insights.

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Annual mortgage loan interest rate in Russia 2016-2021

Leading banks by volume of issued mortgages Russia in 2020

Value of foreign direct investment to the real estate sector in Russia 2010-2021

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Residential Real Estate

Average primary housing prices in Russia 2020-2022, by major city

Quarterly residential property prices in Russia 2000-2023, by market

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Commercial real estate market size in Europe 2023, by country

Value of commercial real estate market in Europe in 2023, by country (in billion U.S. dollars)

Price-to-rent ratio in selected countries globally 2023

House-price-to-rent ratio in selected countries worldwide as of 1st quarter 2023

Fastest growing housing markets worldwide 2023

Annual price growth in selected residential real estate markets worldwide in 2nd quarter 2023

Office rent growth rates in selected cities 2021

Rental growth rates of office space in selected cities worldwide from 2018 to 2021

Luxury real estate price change worldwide 2023, by city

Luxury real estate price change in selected cities worldwide in 2023

• Premium Statistic Share of housing stock owned by population in Russia 2015-2022
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• Premium Statistic Quarterly residential property prices in Russia 2000-2023, by market
• Premium Statistic Average primary housing prices in Russia 2020-2022, by major city
• Premium Statistic Cities with the highest housing selling price in Russia 2022
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Share of housing stock owned by population in Russia 2015-2022

Share of housing stock owned by the population in Russia from 2015 to 2022

Per capita living space in Russia 2005-2022

Area of residential buildings per capita in Russia from 2005 to 2022 (in square meters)

Average square meter price of residential real estate in Russia from 1st quarter 2000 to 2nd quarter 2023, by type of market (in Russian rubles)

Average prices in the primary housing market of major Russian cities in August 2020 and August 2022 (in 1,000 Russian rubles per square meter)

Cities with the highest housing selling price in Russia 2022

Cities with the highest average selling price for residential real estate in Russia in May 2022 (in Russian rubles per square meter)

Cities with the highest apartment rental price in Russia 2022

Cities with the highest average rental price for residential real estate in Russia in May 2022 (in Russian rubles per square meter)

Housing price in the most expensive districts of Moscow 2022

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• Premium Statistic Street retail property area of brands that left Russia 2022, by industry
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Street retail property area of brands that left Russia 2022, by industry

Distribution of street retail property area of foreign brands that left Russia in 1st half 2022, by industry

Total office stock distribution in Moscow 2021, by class

Total office stock breakdown in Moscow (Russia) as of the 1st half of 2021, by class

Office vacancy rate in Moscow 2007-2022

Commercial office real estate vacancy rate in Moscow, Russia, from 2007 to 2022

Take-up of office real estate in Moscow 2016-2022

Commercial office real estate take-up in Moscow, Russia, from 2016 to 2022 (in 1,000 square meters)

Coworking space rent in Moscow 2022, by district

Monthly rent for a workplace in coworking spaces in Moscow in August 2022, by major district (in Russian rubles)

Prime office rental prices in Moscow 2020-2022

Average prime rent of office properties in Moscow from 1st half 2020 to 1st half 2022 (in Russian rubles per square meter per year)

Total density of shopping centers in Moscow Q1 2021, by district

Total density of shopping centers in Moscow (Russia) as of the 1st quarter 2021, by district (in square meters per 1,000 inhabitants)

Shopping center vacancy rate in Moscow 2010-2023

Vacancy rate in shopping centers in Moscow, Russia, from 2010 to 2022 with a forecast for 2023

Shopping center vacancy rate in Saint Petersburg 2016-2022

Vacancy rate in shopping centers in Saint Petersburg, Russia, from 2016 to 2022

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Class A warehouse vacancy rate in Moscow 2011-2022

Vacancy rate of class A warehouse properties in Moscow, Russia, from 2011 to 2022

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Rental rate of A class warehouses in Moscow, Russia, from 2013 to 2022 (in Russian rubles per square meter)

Share of take-up of warehouses in Moscow, Russia H1 2022, by industry

Distribution of industrial warehousing take-up in Moscow, Russia, in 1st half 2022, by industry

Industrial warehouse vacancy rate in Russia 2019-2022, by major city

Vacancy rate of industrial warehouses in Moscow and Saint Petersburg from 1st half 2019 to 1st half 2022

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• Premium Statistic Commercial real estate investment in Russia 2009-2023
• Premium Statistic Commercial real estate investment share in Russia H1 2022, by segment
• Premium Statistic Industrial park investment in Russia 2021, by sector and type

Total value of foreign direct investment (FDI) to the real estate sector in Russia from 2010 to 2021 (in billion U.S. dollars)

Share of investment volume for the real estate market Russia 2021, by region

Breakdown of investment volume for the real estate market in Russia from the 1st quarter to the 3rd quarter 2021, by region

Breakdown of investment volume in real estate Moscow 2019-2021, by sector

Breakdown of investment volume in real estate in Moscow (Russia) from 2019 to the 3rd quarter 2021, by sector

Investment volume in warehouse property in Russia 2006-2022

Annual investment volume in warehouse real estate in Russia from 2006 to the 3rd quarter of 2022 (in billion Russian rubles)

Volume of investment in office property in Russia 2006-2022

Annual investment volume in office real estate in Russia from 2006 to the 3rd quarter of 2022 (in billion Russian rubles)

Volume of investment in retail property in Russia 2006-2022

Annual investment volume in retail real estate in Russia from 2006 to the 3rd quarter of 2022 (in billion Russian rubles)

Commercial real estate investment in Russia 2009-2023

Investment in commercial real estate in Russia from 2009 to 1st quarter 2023 (in billion Russian rubles)

Commercial real estate investment share in Russia H1 2022, by segment

Distribution of investment in the commercial real estate in Russia in 1st half 2022, by segment

Industrial park investment in Russia 2021, by sector and type

Investment in Greenfield and Brownfield industrial parks in Russia in 2021, by sector (in billion Russian rubles)

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Mortgage loan interest rate in Russia monthly 2019-2023

Average weighted mortgage loan interest rate in Russia from January 2019 to September 2023

Annual value of mortgage loans in Russia 2015-2021

Annual value of mortgage loans issued in Russia from 2015 to 2021 (in trillion Russian rubles)

Value of loans granted for real estate activities in Russia 2010-2023

Total value of loans granted in the real estate activities sector in Russia from January 2010 to January 2023 (in billion Russian rubles)

Mortgage loan annual growth rate in Russia 2012-2021

Year-over-year mortgage loans volume growth in Russia from 2012 to 2021

Average weighted mortgage loan interest rate in Russia from 2016 to 2021

Overdue mortgage credit share in Russia 2015-2024

Share of overdue loans in the mortgage portfolio in Russia from 2015 to 2024

Leading Russian regions by mortgage loan volume in 2022

Leading regions by mortgage loan volume in Russia as of May 2022 (in billion Russian rubles)

International Real Estate Investment Forum

September 18-20, 2019, moscow.

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Speakers K2_ALL_SPEAKERS

Vladimir Yakushev, the Ministry of construction of the Russian Federation

Prof. Dr. Mehmet Emin Birpinar, Ministry of Environment and Urbanization of Turkey

Dmitriy Volkov, Ministry of Construction of the Russian Federation

Maksim Egorov, Ministry of Construction of the Russian Federation

Nikita Stasishin, the Ministry of construction of the Russian Federation

Olga Kornienko, Ministry of construction of the Russian Federation

Vladimir Zhidkin, Department for the development of new territories of Moscow

Oleg Ryndin, Department of urban planning policy of Moscow

Business venue №1

Come to PROESTATE for

• Meet more than 2000 top-managers from more than 800 real estate Russian and International companies
• Get up-to-day data about all property segments
• Listen to the Russian Construction Minister and other State authorities
• Participate to panel discussions together with 200+ top Russian and International speakers
• How the Moscow’s real estate market will change in a coming business-season
• What is going on in regions
• What are the latest law amendments and how you should consider them
• Where to get financing for the projects
• What is in demand in Moscow residential market
• What are the trends for the New Moscow
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• How to deliver new formats of properties in your projects
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• On the Media Awards 2019 on September, 18.
• On the PROESTATE&TOBY AWARDS 2019 on September, 19.

INSPIRATION

• Visit the most outstanding objects in Moscow and discover the best development practices during the site-tours on September, 20.

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Building a Commercial Real Estate Consulting or Investing Business

The course will teach you to.

• How to transition from the broker contingent fee revenue model to a consulting and/or investing approach. Identifying commercial real estate opportunities as a consultant or investor.
• Recognize skills and traits of successful consultants and investors.

Course Description

Building a Commercial Real Estate Consulting or Investing Business outlines the opportunities available to commercial real estate professionals to generate revenue outside the brokerage model.

Continuing Education (CE) Disclaimer

CE credit for courses by The CCIM Institute is granted through local commissions and national governing entities. It is available on a state-by-state basis for broker and sales real estate renewal as well as select appraisal and finance renewals. Our state approval schedule is monthly.

If you have questions, please email [email protected] .

Learn about CE requirements and courses available in your state

To obtain CE credit, during course registration you must: 

-Purchase CE credit for each course that needs CE credit, or you will not be able to access the CE certificate through your CCIM My Account.

Before the course starts:

-Complete your The CCIM Institute profile with your CE license information under the Professional Licenses tab in My Account. Enter the license type, number, state, and expiration date.

Please Note: All forms and requests must be submitted within 3 days of the course completion to ensure it complies with state requirements and deadlines. If forms and requests are not submitted within 3 days, your CE will not be processed.

If your real estate commission requires it, you must pass the course with the qualifying score.

This course may require the use of a laptop or desktop computer with full Excel capabilities. Mobile devices, like iPads, tablets, and cellphones, will not run The CCIM Institute's macro-enabled spreadsheets.

PC: Microsoft Office 2000 or higher is necessary to run The CCIM Institute macro-enabled spreadsheets.

Mac: Mac versions of Microsoft Office 2004, 2011, 2016, or 365 are required to run The CCIM Institute macro-enabled spreadsheets.

Browser: The CCIM Institute courses are optimized for use with the Google Chrome web browser.

"It's a wonderful time to be new in commercial real estate ... and certainly organizations like The CCIM Institute can help train someone in the industry" - Jay Olshonsky, President of NAI Global

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