Why Commercial Real Estate Is a Good Investment

Michael Snedeker
Jul 14 · 2 min read
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Commercial real estate executive Michael Snedeker has experience with project acquisition and development as well as negotiating financing. As executive vice president of Elite Building Corp. based in Waltham, Massachusetts, Michael Snedeker works with clients in both the Waltham and Boston areas.

Many investors around the country are currently uncomfortable investing in commercial real estate because the pandemic has caused uncertainty in the market. For example, the recent economic downturn has placed a damper on Boston commercial real estate. However, commercial real estate can still be a good investment.

In many cases, commercial real estate outperforms the stock market. In a volatile market, a portfolio that includes commercial real estate investments can hedge against stock market volatility. From 2000 to 2016, the S&P 500 had an average annual return of 5.4 percent compared with commercial real estate’s 10 percent annual return. Additionally, a well-researched investment in commercial real estate can generate ongoing income.

In Boston, the expectation is that many businesses will transition out of remote work implemented during stay-at-home orders and return to offices, which will create demand for leases, according Boston Magazine. In fact, some experts feel that, as the economy recovers from the effects of the pandemic, demand for commercial leases may increase as employees request larger office spaces that are conducive to social distancing.

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