The Real Estate Capital Institute® notes commercial investors scrambling to redefine ownership strategies

John Oharenko

CHICAGO, IL – Inflation reached a 7% CPI in December, the highest level in 40 years.  And the new year, the benchmark 10-year treasury climbed nearly forty basis points, finally settling at about thirty basis points. 

 As a result, real estate investors scramble to redefine ownership strategies under such conditions.

John Oharenko, Director of The Real Estate Capital Institute®, notes "the realty markets continue evolving beyond simple capital budgeting principles by incorporating civic responsibilities as key ownership objectives."

 

Managing income streams surfaces as one of the main targets for inflation control.  Beyond raising revenues at inflation growth rates and internal cost-cutting measures, investors need to pay attention to various other factors, including the following:

 

Legislative Actions:   The recently passed, one-trillion dollar federal infrastructure bill positively affects the industry.  However, local and regional infrastructure funding gaps exist, forcing more municipalities to levy higher property taxes, an ongoing concern. 

 

 As for income opportunities, America faces an extreme housing shortage, at about 2.5 million units.  

 

Policymakers continue expanding workforce and affordable housing ownership and development initiatives, including favorable financing, tax breaks, and other incentives.

 

Civic Responsibilities:  Environmental, Social Governance ("ESG") compliance creates demand for moving beyond profitability as a key performance metric.  

 

Investors focus on creating more sustainable projects for communities to benefit from, based on the theme of "making the world a better place to live." 

 Income and expense management targets better redeployment of human and natural resources by creating a more inclusive and diverse employment base while targeting "green" development.

 

Automation:  Labor shortages, supply chain disruptions, security, and other significant concerns vex investment planning, both short and long term.  

 

Simultaneously, dramatic improvement in "smart" technologies driven by artificial intelligence help tackle some misgivings. 

Overall costs of implementing such technologies are now well within reach of the real estate industry for creating more efficient property operations.

 

The Real Estate Capital Institute® is a volunteer-based research organization that tracks realty rates data for debt and equity yields.  The Institute posts daily and historical benchmark rates, including treasuries, and bank prime.  

 

  CONTACT:

John Oharenko 

john.oharenko@reci.com

Executive Director

director@reci.com / www.reci.com

 

^The   Real Estate Capital Institute^®

Chicago, Illinois USA 60622