…to your investment strategy.
Question: Now that you are such a large company, why do you still focus your investment dollars on single-family residential properties? Don’t you want to get into the commercial realm?
Commercial properties have a tremendous amount of appeal. The thought of driving
by an office building or a strip center and calling it ‘yours’ is attractive, and it’s certainly
easier to show off a commercial property than it is 100 single family homes. As the Wall
Street Journal points out though, the future for commercial properties is weak at best. The
success of a commercial investment rides with the success of the overall economy and the
good fortunes and business success of your tenants. The simple movement of our society
towards eCommerce, the ability to buy goods from home without having to actually visit
businesses, calls into question how important an actual storefront will be in the future.
When your investment is dependent upon the success of a business, and yet that business’
success isn’t dependent on your property you find yourself in a precarious investment
Our philosophy on investing is quite simple – for any Real Estate investment to work, the
rent must be paid. The best way to ensure that the rent is paid is to tenant the property
with the highest quality tenant…a tenant that not only wants to be in the property, but
needs to be in the property. Maslow wrote long ago that one of our top needs as humans is
shelter. From caves to Country Club Hills, people have always sought out adequate places
to call home. And as Morgan Stanley points out, more and more people are choosing to rent
With a growing tenant base, the clear need for housing, a society moving towards
rentership, and a populous moving away from buying goods in stores, we feel good not only
about our current portfolio position and but also that of our growth strategy. Do you?
- Eric Workman