Philadelphia Metropolitan Area Real Estate Law Blog

http://www.americanbar.org/content/dam/aba/administrative/law_national_security/FLASH_WannaCry_FINAL.authcheckdam.pdf  

  As Philadelphia has seen unprecedented rent growth across all types of real estate, largely driven by new construction at the highest levels of luxury, it is at risk of becoming a city of haves and have-nots, much like New York and San Francisco, only without the booming business community. https://www.bisnow.com/philadelphia/news/state-of-market/philadelphia-real-estate-big-city-problems-73500?rt=40192  

People who are thinking about investing in a piece of commercial property in Philadelphia should consider the purchase carefully. Though commercial real estate can be highly profitable, there are risks with every purchase. The value of commercial real estate can fluctuate with changes in the economy, so it is important to assess the economic trends in each market.

When purchasing property through a limited liability ompany, many real estate investors in Pennsylvania and throughout the country enjoy a number of benefits. However, it may be more difficult to take advantage of them when it comes to residential real estate investments. However, real estate investors can still enjoy the benefits of using an LLC when the transaction is properly structured.

For investors in Pennsylvania and elsewhere who are looking for the diversity of a mutual fund with the high returns of real estate, an interval fund may be worth looking into. These funds allow an investor direct access to a variety of investment types such as private real estate equity and debt. It may also be possible to invest in commercial real estate credit without having to put up as much to make the investment.

Commercial real estate investors in Pennsylvania might pay attention to changes in the economy that can affect real estate markets. Now that the economies of foreign countries are so interconnected, changes around the world can influence real estate markets in the U.S. Though there is a lot of global volatility right now, many real estate analysts believe that the commercial real estate market in the U.S. will stand to benefit from the economic uncertainty in other nations.

The commercial property market in Pennsylvania and around the country is likely to remain active in the next few years according to a group of 51 economists and industry experts. The Urban Land Institute releases a Real Estate Consensus Forecast every two years, and the organization’s September 2016 report predicts that office, retail, industrial and apartment vacancy rates, some of which are at near historic lows, could fall even further.

Commercial properties in Pennsylvania and around the country have been snapped up by institutional investors like hedge funds and insurance companies in recent years, and most financial experts expect pension funds at least to continue to buy heavily despite indications that an improving economy could impact returns in the years ahead. Commercial real estate has gone from accounting for 6 percent of the assets managed by U.S. pension funds to 7.3 percent since 2011 according to the British research firm Preqin, and foreign pension funds have been buying even more aggressively.

Although it may be difficult for some Pennsylvania residents to keep track of the names of different generations, there is a far-reaching influence felt as young people impact various facets of life. Real estate is starting to experience the effect as millennials mature. Nearly half of all home purchases throughout the nation are first-time instances. Nearly two-thirds of those selling a home have never done so before.

Many investors in Pennsylvania and around the country stay out of the commercial property market because of the complex paperwork and the amount of regulations involved, but legislation designed to boost investment and the advent of the information age has opened the real estate market up in recent years. In 2012, President Obama signed the Jumpstart Our Business Startups Act into law, and one of the provisions of the legislation allows real estate developers to reach a far wider audience by posting their properties online.