Real Estate Investment Ideas in a Competitive Market

To avoid heavy competition, seek assets requiring substantial repositioning or rebranding.

Smaller properties tend to trade at a higher capitalization rate than the trophy-type assets.

Don’t overlook the large funds or big players as competition. They are increasingly targeting smaller properties to get better returns.

Higher debt cost tend to make highly leveraged entrepreneurs less competitive.

Deep pocketed players are willing to take more risk to get more yield.

Investors will generate better returns outside the large-cap arena.

Modest or cash heavy buyers are bidding at yields the leveraged players aren’t willing to accept.

Seek and broaden outside your local market to find better deals. Buying out of state may bring more opportunity.   

Infill development, mixed-use projects, major renovations, conversions are all becoming popular alternatives to stabilized cash flow properties. Gaining interest in niche-plays, like healthcare facilities, medical office buildings or even student housing.  

Define your own story and plan for a given investment. This may take the form of a different perspective from the others to justify the risk.

Take advantage of your unique skill sets and area of concentration.

Source: Harbor Stone Advisors Commercial Group