Gregg’s Real Estate Blog

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.