Investment Capital in Economic and Real Estate Development

Image courtesy of George Entis, CBRE

Image courtesy of George Entis, CBRE

A recent CBRE study shows that the Los Angeles market has led all US metropolitan areas in foreign investment in real estate so far in 2016. Investment capital spurs economic development by supporting business growth. It boosts real estate development by funding acquisition and new development.

According to Investopedia, the average return on investment for commercial real estate has been about 9.5% in the past 20 years. While the real estate sector has outperformed the S&P 500 index during that time, it can vary greatly based on the type of real estate, the geographic market, and the investor’s acceptable risk level.

Capital investment in real estate is often misunderstood. For example, investors’ returns are based on capital market conditions and cannot be lowered to close a development feasibility gap. Contact RSG to learn more about investment capital’s role in economic and real estate development and how it can help your community.

Written by Dima Galkin, an Associate at RSG