An economic downturn is no reason to stop investing in property.
As the market continues to fluctuate amid this current period of inflation, the natural reaction is to tighten pockets and curb spending wherever possible. However, when it comes to real estate, it’s better to do the opposite. And leading the pack for smart investing is industrial real estate.
Industrial spaces such as flex and bulk warehouses, storage facilities, manufacturing units and assembly facilities are an intelligent investment in lean times. These spaces offer multiple benefits to investors and can play a significant part in overcoming economic challenges.
Here are three reasons why you should invest in IRE despite the current market.
Businesses Require Space
In the same way a home is a necessity in your life, real estate is a basic need for any company. And for some, industrial property is an absolute requirement. Storing stock requires a warehouse (or, in many cases, multiple warehouses) and producing products requires at least one factory.
Tapping into a basic need is a smart way to stay profitable during market uncertainty. No matter how volatile the economy gets, businesses that needed industrial space before inflation will still need them during and after the economic changes. This has been observed during previous inflation periods and will continue to hold true during the current one.
Bear Markets are Great Investing Opportunities
Investing in IRE via the stock market can provide huge benefits to those who pay attention to patterns and follow trends, even when the market begins trending downward. When stock prices decline 20 percent in a short about of time, the economy officially enters what’s known as a bear market. However, instead of withdrawing funds, sticking with your IRE investment could be a wise move.
Due to its high performance during inflation and recessions, IRE is generally considered to be a strong choice for continuing investment. This is also true for other types of real estate, and a big reason why investors in this sector continue to profit during economic hardships.
Overall Stability
While other types of real estate remain strong investments during market instability, industrial property is particularly well-positioned to survive the hard times. Aside from its necessity for business owners, IRE tends to hold onto its property value very well. In fact, that value often accrues over time, providing big returns on your investment.
Another factor in IRE’s market stability is its variety. With so many different types of industrial space (production, storage, etc.) available, investors are able to diversify relatively easily. This also extents to e-commerce, since many online businesses still need physical spaces to store and/or produce their products. E-commerce often withstands economic trouble much easier than brick-and-mortar businesses, making their warehouses, factories and even server farms a smart investment.
Ready to invest in IRE? The experts at DRK are ready to help you get started.
Until next time,
Other blog posts you may enjoy:
Four Reasons to Invest in Commercial Real Estate
3 Ways Inflation will Impact your CRE Assets
Top 4 CRE Mistakes to Avoid
