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Property Asset Management: Property Investment Strategy – Part One of Four

Property Asset Management: Property Investment Strategy – Part One of Four

Every real estate investment’s performance is composed of a mix of equity-like and debt-like behaviors. From a Property Asset Management standpoint, investment funding is composed of both private and public equity. It is the correlation of the debt and equity components to the funding source that enables us to define the four primary real estate investment structures.

Consider the case of a private real estate equity asset leased to a single credit tenant with a long-term triple-net lease. The payments on the lease resemble the fixed payments associated with a bond, not with equity. In-fact the value of the triple-net leased asset fluctuates in step with the same factors that influence the value of a bond or a mortgage, such as interest rate movements, inflation, and the credit worthiness of the tenant.

At the other extreme, an equity position in an empty, speculative multi-tenant property with short-term leases is driven almost entirely by equity forces. The building’s value from an equity tranche perspective is a function of supply and demand for space in a given market, at a given time. In-fact, the debt-to-equity composition for a property investment can change with time.

By way of illustration, take the triple-net lease in the first example. As the lease ages and approaches its expiration date, the property takes on a greater component of equity-like behavior and less of a component of debt-like behavior; and at the end of the triple-net lease, the property value is only affected by equity forces.

Commercial mortgages are utilized in Property Asset Management to carve out the debt-like behavior from the property investment. For example, the commercial mortgage-backed securities market carves up the cash flows from pools of mortgages to produce bond-like characteristics in the top-level tranches and more equity like cash-flow characteristics in subordinate layers. As property investment funding is composed of both private and public equity, investors typically define these debt and equity tranches with four primary real estate investment structures:

Equity:

* Private Commercial Real Estate Equity – held as individual assets

* Public Real Estate Equity – structured as Property Funds or Real Estate Investment Trust

Debt:

* Private Commercial Real Estate Debt – held as loans or commercial mortgages held in funds

* Public Commercial Real Estate Debt – structured as Commercial Mortgage-Backed Securities

These investment structures react to a common set of influences as well as to unique influences specific to each individual structure. It is the analysis of debt and equity components of each structure that enables property asset managers and their agents to effectively structure the portfolio to meet specific investment goals. In the next two articles, we discuss the debt and equity components for several different property investment objectives.…

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Investment Portfolio Strategies – What You Need to Know! – 2011 and Beyond

Investment Portfolio Strategies – What You Need to Know! – 2011 and Beyond

The world of investment and finance is dynamic. After the recent credit crunch, portfolio managers have become increasingly aware of the need to review and change strategies to match the demands of today and the future. A portfolio consisting of stocks, mutual funds and bonds for example may not be the best mix today. Knowing the right strategies to employ in this highly unpredictable global financial environment is key not only to the portfolio manager but also their clients not forgetting other individuals and interested parties.

Over the years, investors have concentrated on having a portfolio diversified with stocks and bonds with a little percentage higher in favour of bonds. This is because investors saw stocks to fluctuate more than bonds; hence there was wisdom in holding such a balance in a portfolio. If the prices of commodities such as gold, oil, diamond, Ivory, etc continue to rise as being observed now, then inflation together with interest rates will also rise forcing bond prices to fall. The trend of commodity price increases shows no signs of coming down anytime soon.

For these reasons, it is relevant for investors in stocks to also hold a diversified stock that include stocks from other countries (international stocks). For the years ahead, the best portfolio will also include stocks from the oil and gas sectors including real estate not to mention gold- with little reservation. It is also important for investors to reduce their investments in bonds or invest in only short-term and medium term bonds whilst avoiding the investment of long-term bond funds. It will also be beneficial for investors to also hold portfolio that includes some carefully selected fixed and floating money make instruments.

It is also important also to note that investors with reasonably small amount of money to invest should avoid stocks since the dividends that may be realize from this kind of decision may not be enough to support an already bad financial circumstances. Also investors who will expect a return or profit every year should also avoid stocks since dividend payments and capital gains may not be guaranteed. This is because dividend payment is largely at the discretion of the board of directors who may decide to announce the use of the profits generated for more income generation activities supposedly in favour of the company.

If you really want value for money concerning your investments, then a portfolio strategy that employs the commodities above is the way forward for 2011 and the future. These will provide you with the balance to withstand all the economic turbulence.…

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Palm Beach Florida Real Estate and Palm Beach Investment Properties

Palm Beach Florida Real Estate and Palm Beach Investment Properties

Palm Beach is a fully developed community, world-renowned for its extraordinary beauty, quality of life and small-town character. It is one of the most prestigious towns in South Florida. Henry Flagler founded the town in 1911. He was one of the founder of Standard Oil.

At only 14 miles long, The island of Palm beach offers amazing spaces and places. The Town offers fantastic sport fishing, exceptional golfing, the most exclusive country clubs and some of the world’s best boating. Nearby finds a private airfield for your plane and elegant horse farms… Polo anyone?

Even with such world class amenities Palm Beach never loses its intimate, community feel. The glorious weather alone is reason to live here! Wouldn’t you rather be soaking up the sun than shivering in the snow!

Palm Beach is considered an island. Beautiful beaches and the historic Par 3 give the island the feel that you are taking a vacation. The Town also has some famous residents. One of these famous residents include Donald Trump.

The Town’s Real Estate is some of the most sought after property in the world. The luxurious properties of this amazing island are owned by some of the most prestigious people in the world. These properties can be an investment as they tend to keep their value when the economy takes a down turn.

The Island Town has some of the most beautiful homes in the world. The island is not over-crowded so there is plenty of room for new residents.

If you want to know more about the luxurious properties in the Town Of Palm Beach Florida, consider talking to an expert like Susan Polan. She’s an expert in Palm Beach properties. If you are looking to buy a house in this prestigious town please go to her site and contact her.…

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Three Proven Land Investment Strategies

Three Proven Land Investment Strategies

Investing in land is one of the oldest forms of investment. It has a history that literally goes back thousands of it’s still relevant today. With an investment in land you can make a down payment on a piece of property and watch it increase in value as the years pass. It’s not a get-rich-quick type of plan by any means, but it will allow you to safely park your money for long-term growth. Investing in land is not complicated; anyone can do it. You just need to plan a conservative strategy and then follow through with it. There are many such strategies you could use but we’ll take a look at three possibilities.

One simple land investment strategy involves purchasing a piece of real estate and making improvements to it. There are many different variations on this theme. In one example, a person could purchase a piece of land and clear the brush and rocks and use it for farmland. The land could be profitable each year as the owner/farmer grows produce and raises livestock. Such an investment could produce a lifetime of income and even be passed on to subsequent generations for further farm use.

Another simple land investment strategy could involve purchasing a piece of commercial real estate. The commercial real estate could be apartment buildings, office space, a manufacturing facility, a warehouse or any other type of real estate that could be rented to a tenant. The great thing about this strategy is that the owner only needs to put down a small deposit (usually around 20 percent) and takes out a note for the remainder. The monthly rental receipts are then used to pay down the note. Eventually, the tenants pay down the note in full for the owner and the monthly rental receipts become pure profit.

Yet another very simple land investment strategy is to purchase a foreclosure property to sell for a profit. In such a scenario the owners are unable to make the payments and the bank is making preparations to repossess the property. These homes can usually be quickly purchased for as much as 20 percent below value and then resold for a profit. An industrious investor can even make a few targeted improvements that can dramatically increase the value, resulting in greater profits.…