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REITs as commercial real estate investment options

On Behalf of | Oct 13, 2015 | Real Estate Transactions

While many people in Delaware may dream about one day owning a large commercial property, few are able to actually accomplish it. However, real estate investment trusts provide a potential investment option that can allow individual investors to diversify their investment portfolios to include shares in real estate.

REITs are traded on the stock market, and as such, they are a very liquid asset. This can allow individual investors to trade daily if they so choose. By law, profits are paid to investors via dividends. According to data on returns, REITs have consistently performed better than the S&P 500 Index over the last 25 years, making them an attractive investment option.

The average return on investment over the past 20 years for REITs was 17.6 percent in cases in which earned dividends were reinvested. Offering shares through REITs may also be a good option for a business that owns commercial real estate. By doing so, they may be better able to raise capital while adding an additional avenue for growth.

Real estate transactions can be very complex, involving significant documentation and large sums of capital. The availability of REITs as an option may be a good one for those who are interested in the commercial marketplace as a method of diversifying their portfolios. People who are interested in REITs as an option may benefit by consulting with a real estate attorney. Legal counsel may be able to help their clients evaluate available REITs. They may then provide recommendations to their clients regarding the best potential options, based on the individual fund’s performance history and expected returns. Attorneys may also be able to help their business clients that own commercial real estate establish REITs. This may help them to raise needed capital to enjoy more robust growth.