Investing in Single and Multifamily Real Estate Sectors
Historically, other asset classes, such as equities, have generated higher returns than real estate, although these returns are coupled with higher risk and volatility. When asset class returns relative to the level of risk are calculated over an extended period of time and measured in terms of volatility (or standard deviation), it becomes apparent that real estate produces competitive absolute returns when compared to stocks and bonds. Also clear is the superior risk adjusted return delivered by real estate in comparison to equities.
Compared to bonds, private real estate delivers a higher return with the same level of risk. Historically, private real estate has exhibited significantly lower volatility combined with high absolute and risk adjusted returns. The financial crisis of 2008 created a market devoid of inventory for prospective purchasers. While certain markets are still recovering, other markets have experienced significant strength in part due to a significant lack of housing inventory for sale.
Few investment opportunities provide superior return potential with mitigated loss risk via real estate securitization. By securing investors with the real estate assets of the project, Mission Capital Fund I, LLC seeks to provide principal capital loss protection to investors to the maximum extent that is available.
Real estate has pronounced the supply and demand cycles, a product of the long construction lead times required to develop most properties. However, population growth and other demographic shifts ensure that demand for commercial real estate will grow over time.
The Economist Intelligence Unit projects that the United States will grow by some 2.7 million people per year between 2010 and 2020, which should translate into continued demand for buildings for business, industry and residences.
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