WHY COMMERCIAL REAL ESTATE?
SOME OF THE GREATEST, LONG-TERM WEALTH BUILDING OPPORTUNITIES EXIST ONLY IN COMMERCIAL REAL ESTATE INVESTMENTS.
Wellings Capital started out as a commercial multifamily syndication firm – see Our Story. Our low risk strategy and commitment to not overpay for multifamily assets flew in the face of the overheated apartment investment environment in the US since late in The Great Recession.
The Wellings team eventually began to research other real estate asset types. The team identified two commercial asset classes with significantly better acquisition prospects and appreciably higher profit opportunities. These assets provide investors with unique return profiles on their own, and together, their complimentary characteristics provide a powerful combination of income and appreciation.
Self-Storage syndications provide investors significant ground-up, value-add, and income opportunities. Purchased and operated right, these assets are outstanding additions to most commercial real estate portfolios.
- Fragmented mom & pop ownership provides significant acquisition opportunities
- Value-add opportunities through professional management, ancillary income, and specialized marketing
- Recession-resistant. Lowest risk and highest return of all commercial asset classes over decades
- High switching costs & misperceived length of stay lead to price elasticity
Manufactured Home Communities
Mobile Home Parks have been an emergent investment class and have provided investors with a predictable income stream in any economy. Warren Buffett has made significant and growing investments in this space, and we would do well to take notice.
- Ever-diminishing national supply amidst a consistent demand for affordable housing
- Fragmented mom & pop ownership and lack of institutional interest lead to significant acquisition opportunities
- Very high switching costs lead to stable long-term tenants
- Simple infrastructure (rented land) means simple operations and minimal, predictable maintenance and capital budgets
- Unique agency financing: Freddie Mac and Fannie Mae provide low interest rate debt with two supplemental financing opportunities. This allows significant return of principal prospects
“According to the economists, we are experiencing the biggest jump in housing prices in four years – prices are rising while the supply of housing is getting smaller. It’s basic supply and demand. That’s why everyone in the manufactured housing industry is so important. You are a big part of the solution to providing unsubsidized, quality, affordable housing.”
– Ben Carson, United States Secretary of Housing and Urban Development (HUD) at the 2018 Manufactured Housing Industry Expo in Las Vegas, NV
Historically, commercial real estate has had more up years than down years and less overall volatility
Direct real estate investments have outperformed inflation better than any other income producing asset.