Whether in a full-tilt economic malaise or dancing on the outskirts, “recessionary times” are unfortunately a cyclical and natural part of the nation’s financial path. Watching or reading any reported news cycle today can lead to instant anxiety for investors, fueled by discussion of inflation, global instabilities, rising interest rates and recession talk.
But recessions also offer opportunities for alternative investments in real estate. Three primary factors can make private real estate a good buy in challenging economic markets if you’re looking for investment alternatives.
- Recessions create bargains: As seen today, a downturn in the economy can hurt a previously scorching housing market. That opens up new opportunities for investors to purchase rental properties at a discount.
- Independence from the market: Even if stocks continue to experience increased volatility, the stock market historically displays little correlation to the real estate market. It can also provide a much-needed hedge against inflation.
- Rental housing will always be in demand: As already seen in most of the country, increased demand for rental properties should continue to rise during a recession. With a limited and sometimes finite supply of housing available, property investors are often in a position to rely on consistent rental income.
One of the easiest and, for many, profitable opportunities in real estate investment is crowdfunding.
EquityMultiple is one alternative investment platform that offers crowdfunded real estate investments with short- and long-term growth opportunities.
It’s been an eventful year for the company, which saw 38% year-over-year growth in total dollars invested in Q2, with a distribution of $70 million to its investors in the first half of the year. That distribution represented a 225% growth over the first half of 2021, and EquityMultiple credits the performance to its asset management team for much of its success.
As an example of its successful asset management strategy, the company points to its exit of its Hartford, Connecticut, Last Mile Industrial Facility investment in June through a sponsor buyout. That value-add investment into a 256,373 square foot industrial property resulted in a nearly 56% net annualized return and a 2.03x net return multiple for our investors over a 19-month investment period.
Looking ahead, EquityMultiple is actively exploring new structures for portfolios and fund offerings to support investor diversification. Industrial assets now make up nearly 10% of its portfolio. In addition to the successful exit of the Hartford property, the company is pursuing several additional industrial assets.
Today’s Private Market Offering Highlights
- Arrived Homes, the company that allows investors to buy shares of single-family rental homes, is set to launch 14 new rental properties on its platform with a minimum investment of $100.
- Vacation rental investment platform Here is set to launch a new offering for San Diego property with a $100 minimum investment.
Find more current offerings and news on Benzinga Alternative Investments
Or browse current investment options based on your criteria with Benzinga’s Offering Screener.
Photo by Grand Warszawski on Shutterstock