You look for location and income stream in the invesment you select to buy. It may take a little research to find both in the right investment. Is the county, city or (local area) growing - expected to grow over lease base term? Is the property an out parcel or corner? Will the site and improvements increase in value regardless of income over the lease base term. What is the exit and sale strategy that makes the most sense for you, your wife, your children or heirs? What tenant types that are in vogue today will still be in vogue 10 years out? These considerations and the other personal investment goals you have today all go into finding and buying investment property. As they say, let the buyer beware.
If you missed this article by Jonathan Clements in the April 12th WSJ, let us know and we will email it to you. Mr. Clement's article is well thought out and worth the read....realstreetex investment property research division.
As the 10-year Treasury Yeild hit 4.99% last Friday, near its highest value since June 2002, REIT shares began to slide. The MSCI U.S. REIT Index (RMZ) dropped 1.53% to 916.90 and, then on Monday with bond yields holding steady at 4.96%, the index fell 1.08% more to as low as 907.04. Some REIT investors may move to individual income investment grade properties now with CAP rates moving up only slightly in most segments of investment property market.
Just over 30 million square feet of Retail and Commercial will be completed by the end of 2006 if projections for this sector hold. Because of this upswing in developement, and, mild uncertainty for retail we may see investment opportunities in neighborhood and community commercial centers in the US this year and next. The key will market (state, city) locations and and in-market site location. This sector has been the bell weather leader for investors for the last four years. Look for price opportunities late '06 and '07.