If you’re looking for a relatively long term safe haven investment these days, what has the lowest risk? Retail properties risk having tenants closing locations and sites going dark. Office users are downsizing and consolidating operations. If a corporation files bankruptcy, your lease doesn’t do you much good. Empty space generates no return on investment. So what real estate is immune from these types of risks? Long-term leased federal office buildings will always have a rent check delivered on time with no risk of it bouncing when you get it to the bank. If you want to be the sole owner, entry level on these types of properties is usually around the two million dollar range . I have a developer of these types of investments that currently has properties available anywhere from $2.5 million up to about $20 million. These are class A or B office buildings built within the last year with 10-15 year leases in place. Rates of return generally run around 6.5-7%. Compared to annuities guaranteed by private insurance companies, these look pretty warm and fuzzy these days.
March 5, 2009
March 1, 2009
Are Life Insurance Companies Next?
There was a sobering article on MSN Money a few days ago eluding to the possibility that life insurance companies with heavy exposure in mortgage backed securities and other risky investment vehicles could be the next to fall.
Over the last several months, life insurers have been hit by downgrades from every ratings agency, reflecting their exposure to volatile credit and investment market conditions. Those investors that are invested in longer-range products that involve significant upfront funding like annuities should be most concerned.
See the complete article here.