{"id":118,"date":"2018-12-05T14:31:32","date_gmt":"2018-12-05T19:31:32","guid":{"rendered":"https:\/\/www.lee-associates.com\/miami\/?p=118"},"modified":"2019-05-15T15:44:12","modified_gmt":"2019-05-15T19:44:12","slug":"marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/","title":{"rendered":"Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019"},"content":{"rendered":"<p>As high-net-worth (HNW) investors\u00a0zone in on commercial real estate opportunities for 2019,\u00a0Opportunity Zones, multifamily, marijuana, retail and industrial are emerging as some of the key areas to watch.<\/p>\n<p>Real estate investments made next year by HNW investors should be weighed against rising interest rates and the prolonged economic expansion, according to Doug Brien, co-founder and CEO of Oakland, Calif.-based Mynd Property Management, which specializes in multifamily assets.<\/p>\n<blockquote>\n<h3>\u201cFor deals to make sense, investors will need to make sure cap rates remain high enough to balance out rising interest rates,\u201d Brien says. \u201cIn my opinion, a long-time horizon should be incorporated into any investor\u2019s strategy if they\u2019re acquiring properties at such a late stage in this rising interest rate environment.\u201d<\/h3>\n<\/blockquote>\n<p>Ross Yustein, chairman of the real estate department at New York City law firm Kleinberg Kaplan Wolff &amp; Cohen PC, echoes the cautious approach espoused by Brien.<\/p>\n<blockquote>\n<h3>\u201cIt\u2019s always difficult to predict when\u00a0the market will reverse or how bad it will be. Investors should keep in mind that commercial real estate can be a lagging indicator during the early stages of an economic contraction,\u201d Yustein says.<\/h3>\n<\/blockquote>\n<p><em>NREI<\/em>\u00a0interviews with U.S. real estate professionals, including Brien and Yustein, indicate that the following are five of the themes that HNW real estate investors should track in 2019.<\/p>\n<h3><strong>1. Opportunity Zones<\/strong><\/h3>\n<p style=\"padding-left: 30px\">Among real estate professionals contacted by\u00a0<em>NREI<\/em>, the topic of Opportunity Zones surfaced to the top. Experts anticipate that next year many HNW investors will seek to capitalize on the federal tax reform legislation passed in 2017 that included the establishment of Opportunity Zones. The provision allows for deferment of capital gains taxes for investment in ground-up and redevelopment projects in economically depressed locations.<\/p>\n<p style=\"padding-left: 30px\">Across the U.S., government officials have designated 8,700 Opportunity Zones, ranging from several-block-long urban stretches in big metro areas to entire towns in rural states, according to the\u00a0<a href=\"https:\/\/www.nreionline.com\/finance-investment\/eight-takeaways-day-two-urban-land-institute-s-fall-meeting\">2019 Emerging Trends in Real Estate report<\/a>, published by professional services firm PwC and the Urban Land Institute (ULI).<\/p>\n<p style=\"padding-left: 30px\">Opportunity Zones are a \u201cmajor focus\u201d of HNW investors, according to Neil Madsen, founding principal of New York City-based real estate consulting and management firm Madsen Advisors LLC<\/p>\n<blockquote>\n<h3 style=\"padding-left: 30px\">\u201cI expect there to be a lot of activity next year with Opportunity Zones, but I wonder whether the actual investment opportunities will materialize fast enough to absorb the available investment dollars,\u201d Yustein says.<\/h3>\n<\/blockquote>\n<p style=\"padding-left: 30px\">Still, Opportunity Zones could have a \u201cmeaningful impact\u201d for HNW investors, according to Lee Roberts, managing partner of SharpVue Capital LLC, a Raleigh, N.C.-based wealth management firm.<\/p>\n<blockquote>\n<h3 style=\"padding-left: 30px\">\u201cAs with all tax provisions, though, it\u2019s important not to let the tail wag the dog\u2014it has to be a fundamentally sound real estate investment first,\u201d Roberts says.<\/h3>\n<\/blockquote>\n<p style=\"padding-left: 30px\">A number of\u00a0fund sponsors are setting up opportunity funds\u00a0as vehicles for Opportunity Zone investments.<\/p>\n<blockquote>\n<h3 style=\"padding-left: 30px\">\u201cOpportunity funds enable investors to do well by doing good. While important details need to be known and carefully analyzed, such investments are worthy of consideration,\u201d says George Mateyo, chief investment officer at Cleveland-based wealth manager Key Private Bank.<\/h3>\n<\/blockquote>\n<h3><strong>2. Multifamily<\/strong><\/h3>\n<p style=\"padding-left: 30px\">Brien recommends HNW investors consider multifamily investments in 2019, particularly \u201csmall residential\u201d assets in\u00a0<a href=\"https:\/\/www.nreionline.com\/multifamily\/value-add-multifamily-properties-outside-los-angles-downtown-attract-investors\">urban infill loca<\/a>tions where rental demand should remain strong, even in the face of an economic downturn. According to Brien, the majority of American apartment dwellers live in these properties, which have 50 units or less and make up a $430 billion-a-year industry in the United States.<\/p>\n<blockquote style=\"padding-left: 30px\">\n<h3 style=\"padding-left: 30px\">\u201cThere tends to be more efficiency in this mom-and-pop market, meaning investors are less sophisticated and more deals can be found,\u201d he notes.<\/h3>\n<\/blockquote>\n<p style=\"padding-left: 30px\">Low-rise\u00a0garden-style apartment properties might be a good defensive play\u00a0for HNW investors in 2019, adds Madsen. These apartments are an affordable option for would-be homebuyers who are content with renting, at least for the time being, he says.<\/p>\n<p style=\"padding-left: 30px\">According to the PwC\/ULI report, garden-style apartments are producing higher returns and higher-yield cap rates compared with other multifamily properties. Garden apartments stand to benefit from the \u201cstrong move\u201d toward secondary and tertiary markets, along with heightened interest in suburban assets, the report says.<\/p>\n<blockquote style=\"padding-left: 30px\">\n<h3 style=\"padding-left: 30px\">\u201cI strongly believe that multifamily will be the safest asset class in 2019; people always need a roof above their head,\u201d says Ellie Perlman, founder and CEO of Blue Lake Capital LLC, a Santa Monica, Calif.-based investment firm that concentrates on multifamily assets. \u201cMy strategy is to focus on class-B\u201410- to 20-year-old buildings\u2014because the luxury high-end apartment buildings will suffer from high vacancy when the market shifts.\u201d<\/h3>\n<\/blockquote>\n<p style=\"padding-left: 30px\">While multifamily might be an attractive sector, Roberts urges HNW investors to exercise caution, given that the supply of multifamily properties has\u00a0ramped up dramatically since the Great Recession. In many markets, he notes, multifamily is a relatively new product type, compared with seasoned markets like New York City and Washington, D.C., where reams of historic absorption data are available.<\/p>\n<p style=\"padding-left: 30px\">The absence of in-depth absorption data for some less mature markets makes it harder to predict how multifamily assets will perform in an economic downturn, Roberts says, \u201cbut we don\u2019t see that uncertainty reflected in the pricing.\u201d<\/p>\n<h3><strong>3. Marijuana<\/strong><\/h3>\n<p style=\"padding-left: 30px\">A number of real estate professionals are buzzing about the prospects for properties serving the red-hot marijuana market.<\/p>\n<p style=\"padding-left: 30px\">Real estate attorney Melanie Scroble, a partner at Ocean Township, N.J.-based law firm Ansell Grimm &amp; Aaron PC, says the increasing legalization of recreational and medical marijuana in the U.S. promises to usher in a \u201chuge influx\u201d of\u00a0HNW investors who are trying to profit from this wave. San Francisco-based market research and consulting firm Grand View Research estimates the U.S. market for legal marijuana totaled nearly $7.1 billion in 2016 and forecasts a compounded annual growth rate of almost 25 percent from 2017 to 2025.<\/p>\n<p style=\"padding-left: 30px\">There\u2019s \u201ctremendous potential\u201d in 2019 for properties that can accommodate marijuana-related businesses, in Scroble\u2019s view, including retail stores, pot-growing facilities, warehouses and distribution centers.<\/p>\n<h3><strong>4. Retail<\/strong><\/h3>\n<p style=\"padding-left: 30px\">To be sure, the\u00a0retail real estate sector has suffered in recent years. However, opportunity awaits HNW investors who can hunt down distressed retail assets that are undervalued and are ripe for redevelopment, says Joe DiRosa, a Pennsylvania real estate agent who handles commercial and residential deals. One example: transforming a beleaguered retail property into a mixed-use project anchored by a multifamily component.<\/p>\n<p style=\"padding-left: 30px\">In that same vein, DiRosa suggests exploring entertainment properties such as bowling alleys, roller rinks and golf courses as prospective investments.<\/p>\n<blockquote style=\"padding-left: 30px\">\n<h3 style=\"padding-left: 30px\">\u201cThe need for entertainment is the one retail segment that\u00a0hasn\u2019t been affected by Amazon,\u201d DiRosa says. \u201cThese properties usually can be negotiated at a fair price, are usually large\u00a0acreage\u00a0in high-traffic areas, have automatic revenue and can\u00a0always be torn down and redeveloped later.\u201d<\/h3>\n<\/blockquote>\n<h3><strong>5. Industrial<\/strong><\/h3>\n<p style=\"padding-left: 30px\">The e-commerce explosion fueled by Amazon and other players\u00a0continues to spur demand for industrial space\u00a0across the U.S., with both occupancy rates and rental rates still soaring.<\/p>\n<p style=\"padding-left: 30px\">Across the board, industrial assets are \u201chighly favored,\u201d particularly \u201clast mile\u201d facilities serving major population hubs, Madsen says.<\/p>\n<blockquote style=\"padding-left: 30px\">\n<h3 style=\"padding-left: 30px\">\u201cRetail\u2019s pain will continue to be industrial\u2019s gain,\u201d says Danny Mulcahy, director of equity at Denver-based commercial real estate investment firm Northstar Commercial Partners Management LLC.<\/h3>\n<\/blockquote>\n<p style=\"padding-left: 30px\">While no industrial landlord would scoff at an Amazon lease, not all industrial properties must be geared toward e-commerce tenants, says Roberts, the wealth management executive.<\/p>\n<blockquote style=\"padding-left: 30px\">\n<h3 style=\"padding-left: 30px\">\u201cWe see opportunity in older buildings that are well-located and affordable for the plumbing supply company tenant, for example,\u201d Roberts says. \u201cThat tenant still needs an infill location, but few municipalities allow new infill industrial and, at least in the Southeast, much of what exists currently is being turned into loft apartments and microbreweries.\u00a0These assets have strong cash flow and may have some development upside in the future.\u201d<\/h3>\n<\/blockquote>\n<p>&nbsp;<\/p>\n<p><em>Source:\u00a0 <a href=\"https:\/\/www.nreionline.com\/finance-investment\/opportunity-zones-marijuana-related-properties-and-retail-assets-among-best-cre\" target=\"_blank\" rel=\"noopener noreferrer\">NREI<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As high-net-worth (HNW) investors\u00a0zone in on commercial real estate opportunities for 2019,\u00a0Opportunity Zones, multifamily, marijuana, retail and industrial are emerging as some of the key areas to watch. Real estate investments made next year by HNW investors should be weighed against rising interest rates and the prolonged economic expansion, according to Doug Brien, co-founder and CEO of Oakland, Calif.-based Mynd Property Management, which specializes in multifamily assets. \u201cFor deals to make sense, investors will need&#8230;<\/p>\n","protected":false},"author":76,"featured_media":120,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,105],"tags":[67,37,65,66,64,68,62,61,60,63],"class_list":["post-118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-industrial","tag-amazon","tag-e-commerce","tag-high-net-worth-investors","tag-hnw","tag-industrial","tag-investment-trends","tag-marijuana","tag-multifamily","tag-opportunity-zones","tag-retail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.7 (Yoast SEO v28.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019 - Lee &amp; Associates South Florida<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019\" \/>\n<meta property=\"og:description\" content=\"As high-net-worth (HNW) investors\u00a0zone in on commercial real estate opportunities for 2019,\u00a0Opportunity Zones, multifamily, marijuana, retail and industrial are emerging as some of the key areas to watch. Real estate investments made next year by HNW investors should be weighed against rising interest rates and the prolonged economic expansion, according to Doug Brien, co-founder and CEO of Oakland, Calif.-based Mynd Property Management, which specializes in multifamily assets. \u201cFor deals to make sense, investors will need...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/\" \/>\n<meta property=\"og:site_name\" content=\"Lee &amp; Associates South Florida\" \/>\n<meta property=\"article:published_time\" content=\"2018-12-05T19:31:32+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-05-15T19:44:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.lee-associates.com\/southflorida\/wp-content\/uploads\/sites\/62\/2018\/12\/money_46089472_s.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"576\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"ssabatier\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ssabatier\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/\"},\"author\":{\"name\":\"ssabatier\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/#\\\/schema\\\/person\\\/d5447dfddeb31f214f5f2eb84c74068a\"},\"headline\":\"Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019\",\"datePublished\":\"2018-12-05T19:31:32+00:00\",\"dateModified\":\"2019-05-15T19:44:12+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/\"},\"wordCount\":1287,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/wp-content\\\/uploads\\\/sites\\\/62\\\/2018\\\/12\\\/money_46089472_s.jpg\",\"keywords\":[\"amazon\",\"e-commerce\",\"high net worth investors\",\"hnw\",\"industrial\",\"investment trends\",\"marijuana\",\"multifamily\",\"opportunity zones\",\"retail\"],\"articleSection\":[\"All News\",\"Industrial\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/\",\"url\":\"https:\\\/\\\/www.lee-associates.com\\\/southflorida\\\/2018\\\/12\\\/05\\\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\\\/\",\"name\":\"Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019 - Lee &amp; 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Real estate investments made next year by HNW investors should be weighed against rising interest rates and the prolonged economic expansion, according to Doug Brien, co-founder and CEO of Oakland, Calif.-based Mynd Property Management, which specializes in multifamily assets. \u201cFor deals to make sense, investors will need...","og_url":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/","og_site_name":"Lee &amp; Associates South Florida","article_published_time":"2018-12-05T19:31:32+00:00","article_modified_time":"2019-05-15T19:44:12+00:00","og_image":[{"width":1024,"height":576,"url":"https:\/\/www.lee-associates.com\/southflorida\/wp-content\/uploads\/sites\/62\/2018\/12\/money_46089472_s.jpg","type":"image\/jpeg"}],"author":"ssabatier","twitter_card":"summary_large_image","twitter_misc":{"Written by":"ssabatier","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/#article","isPartOf":{"@id":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/"},"author":{"name":"ssabatier","@id":"https:\/\/www.lee-associates.com\/southflorida\/#\/schema\/person\/d5447dfddeb31f214f5f2eb84c74068a"},"headline":"Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019","datePublished":"2018-12-05T19:31:32+00:00","dateModified":"2019-05-15T19:44:12+00:00","mainEntityOfPage":{"@id":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/"},"wordCount":1287,"commentCount":0,"image":{"@id":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/#primaryimage"},"thumbnailUrl":"https:\/\/www.lee-associates.com\/southflorida\/wp-content\/uploads\/sites\/62\/2018\/12\/money_46089472_s.jpg","keywords":["amazon","e-commerce","high net worth investors","hnw","industrial","investment trends","marijuana","multifamily","opportunity zones","retail"],"articleSection":["All News","Industrial"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/","url":"https:\/\/www.lee-associates.com\/southflorida\/2018\/12\/05\/marijuana-related-properties-industrial-opportunity-zones-among-best-cre-bets-for-investors-in-2019\/","name":"Marijuana-Related Properties, Industrial, Opportunity Zones Among Best CRE Bets For Investors In 2019 - Lee &amp; 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