You No Longer Need A Big Portfolio Or Tons Of Cash To Start Investing In Commercial Real Estate

Economic conditions in the U.S. have made stock market investing a treacherous option.

From an economic performance viewpoint, investors are looking for new opportunities that don’t include dumping money into the market. The performance of formerly trusted blue-chip tech darlings like Tesla Inc. TSLA, Alphabet Inc. GOOGL and Apple Inc. AAPL, which just experienced some of their most significant declines ever in the second quarter, are causing savvy investors to look elsewhere. 

Real estate investment trusts (REITs), which used to be a recession hedge go-to opportunity, aren’t currently performing well in the market. But economic performance is a different issue. While many REITs are reporting higher revenue figures and earnings per share, some got sucked into the down-trending market vortex, which has shown to be fueled not by numbers but by emotion.

This Isn’t Your Father’s CRE

The commercial real estate (CRE) market has also changed drastically in the past few years, affected by supply-chain shortages, labor, technology and economic factors driving up inflation. The pandemic had an adverse effect on many property owners. Still, it turned out to be positive for those who own office space because direct CRE/RE investments aren’t correlated with the market. Commercial real estate is historically a great hedge against inflation. Because of that, there is growing competition for commercial real estate assets, with more investors looking to enter the asset class.

But for all levels, from nonaccredited traders to high-net-worth accredited investors, several new commercial real estate investment platforms are opening the door to new opportunities. 

Realty Income Corp. O, a REIT that invests in freestanding, single-tenant commercial properties, has added new properties to its portfolios and increased total revenue by as much as 45% year-over-year. New York-based LEX has initial public offerings (IPOs) for single-asset commercial real estate investments that can then be traded on the secondary market. 

The company gives investors opportunities to build more wealth without the necessity of a high-balance bank statement. It also allows them to sit side-by-side with owners, capturing the benefits of their own CRE ownership such as appreciation, distributions and tax-advantaged income. In the process, LEX also provides investors access to the asset class without large minimum investment hurdles and the freedom to move in and out of positions without holds or lockups. 

LEX turns each of the individual buildings it represents into public stocks and allows all economic levels of investors to open an account with the company and browse options ranging from multifamily to office buildings. Those investors become shareholders who can earn income when owners pay dividends and trade their shares on LEX’s public market, free from lockups or hold periods. 

Each building LEX offers has its own ticker symbol and stock chart. The company opens up direct and tax-advantaged ownership in an asset class previously inaccessible to most investors.

SOLIS Investment Closes July 21 

For example, LEX investors can take advantage of properties that would typically be far beyond the income scope of some, such as its newest property, SOLIS - Capitol Hill in Seattle. The recently constructed, centrally located, six-story, mixed-use building at 1300 E. Pike St. is 100%-leased*. The property has 34,260 square feet of rentable space, including nearly 6,000 square feet of ground-floor retail space. 

SOLIS, completed in 2020, has been certified as a Passive House by the Passive House Institute US (PHIUS), which also named it 2021 Best Overall and Best Multifamily Project of the Year. Designed in accordance with PHIUS building standards, SOLIS uses up to 70% less energy for heating and cooling, which substantially reduces its overall carbon footprint, allowing residents to experience cost savings on utilities. 

The property’s high-performance thermal envelope and triple-pane windows, along with heat pump and energy recovery technology in every unit, provide a comfortable, quiet and healthier interior living environment. SOLIS received a perfect Energy Star rating of 100.

SOLIS’ retail space is leased by local businesses, each with five-year base terms, contractual annual rent steps and two- to five-year renewal options.

Another obvious advantage is that the property is located in one of the nation's most robust job and housing markets. Seattle’s unemployment rate is at 2.1% and local median income growth is outpacing the national level by more than 25% over the past eight years. Over the same period, the city’s rent has grown 145%, far eclipsing significant markets like San Francisco, Chicago and New York.

For more information on LEX-Markets, the SOLIS Seattle property or its other portfolio investment opportunities, visit www.lex-markets.com. 

*As of 7/19/2022

Review offering circular

Potential investors are encouraged to consult with professional tax, legal, and financial advisors before making any investment into a securities offering. This investment may not be suitable for all investors. Distributions and liquidity not guaranteed. Property performance and performance of property tenants not guaranteed. Diversification does not eliminate the risk of experiencing investment loss. 

All investment services are offered by LEX Markets LLC, Member FINRA/SIPC.

Image: SOLIS property courtesy of LEX