While REITs Are Struggling, Private Market Real Estate Pulls In Huge Returns

If you want to figure out whether private market real estate or real estate investment trusts (REITs) are better suited for the ongoing permacrisis, all you need to do is take a peek at REIT composite returns. According to the National Association of Real Estate Investment Trusts (Nareit), the biggest body representing American REITS, they averaged a 9.25% gain since 2019. Not great but also not concerning. But their one-year returns paint a dire picture. 

Source: FTSE Nareit US Real Estate Indexes

To add insult to injury, Blackstone’s $69 billion REIT was forced to limit withdrawals because of a surge in redemption requests — a move likely to proliferate across the REIT landscape because of rising interest rates. If virtually risk-free T-bonds yield 4%, all of a sudden REITs with an equal yield start to look a whole lot worse.

Stock market volatility is another headache investors are looking to steer clear of. Even if you choose a REIT with strong fundamentals, it can still come crashing down simply because of market fluctuations. 

Add to that skyrocketing operational costs eating away at revenue, and you get the perfect storm. Multibillion-dollar money machines need boatloads of cash on a daily basis to keep them running, and the CEO’s private jet may well be one of them.

On the flip side, the landscape is riddled with opportunities that savvy investors can’t afford to gloss over.

Accredited investors: Click here to gain access to private market real estate with as little as $5,000

When the going gets tough, investments backed by tangible and predictably coveted assets offer the best risk/profit tradeoff. EquityMultiple, a New York-based commercial real estate investment platform, has been offering just that since its inception but still poses what your financial adviser would call “an opportunity well-suited for investors with a high risk tolerance” back in 2019. 

Four years down the line, it has eclipsed REITs by 7.75% and pulled in a 17% total net return since 2019. By making zero compromises on due diligence, the company’s team now has over $4.4 billion in total project value and the trust of 38,451 accredited investors who eagerly await new projects. And for them, the ability to fund individual projects represents one of the key benefits.

EquityMultiple allows you to partly own commercial real estate units verified by multiple layers of due diligence. You can pinpoint the ones that align with your investment criteria by reading their descriptions on the company’s website. Investment options aren’t limited to different types of projects. You can also create a combo of securities according to your needs.

The company offers equity, preferred equity and senior debt investments. For your convenience, you can choose between three investment packages with a unique blend of project and securities types to fit your risk tolerance and liquidity preference. 

The company is open to all accredited investors who are after short-term or long-term passive income streams. The minimum investment is $5,000. To invest in its projects, a brief signup process is all that’s required. 

If you’re on the lookout for a cash-flowing, asset-backed way to protect and grow your wealth amid prolonged economic uncertainties, you should investigate EquityMultiple. 

Click here to find your path to investment in commercial real estate.