CrowdStreet
CrowdStreet

Striking the balance between risk and reward.

Email sent: Apr 15, 2020 1:09pm
See how different commercial real estate investment opportunities measure up.

The balancing act between risk and reward.

Build a commercial real estate portfolio that meets your goals. 

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As they say, “high risk, high reward.” Riskier investment opportunities, like early-stage VC funding, often target a high return as a way to justify the risk to investors. Less risky investments, like bonds, generate a lower return but are generally considered a “safe bet.”

Commercial real estate investments can fall anywhere on that spectrum depending on the type of project. There are four common investment risk profiles: core, core-plus, value-add, and opportunistic.

Core deals are often considered the least risky commercial real estate investment. Typically fully-leased with high-quality tenants, these properties need few repairs or improvements and are often in major metros. They may generate lower returns overall, but are much more likely to have monthly or quarterly cash flow.

 

On the other end of the spectrum, opportunistic deals are usually the riskiest investments. The sponsor may be executing a complicated business plan, like rehabilitating or developing a property, and investors are counting on many things going right. But the higher risk can mean a higher reward when the property sells.




Understanding Risk vs. Return

Compare the relationship between the amount of risk vs. potential return (or loss) associated with each type of property.

Building a diversified and risk-adjusted portfolio means finding a balance between risk and reward. The CrowdStreet Marketplace has published more than 400 deals since 2014, giving you the ability to build a portfolio that meets your personal investing criteria, including your appetite for risk.

 
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CrowdStreet, Inc. (“CrowdStreet”) maintains a commercial real estate investor technology platform through which companies that develop and own commercial real estate can offer investment opportunities to qualified investors (the “Marketplace”).  Direct and indirect purchase of real property involves significant risk. Investors must be able to afford to lose their entire investment. Additionally, investment opportunities posted on the Marketplace are “private placements” of securities that are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment.  Real estate should only be part of your overall investment portfolio. Neither the SEC nor any state securities commission or regulatory authority has approved, passed upon or endorsed the merits of any offering on the Marketplace.

 

CrowdStreet is not a registered broker-dealer or investment adviser. CrowdStreet does not endorse any of the investments on the Marketplace or provide investment recommendations or advice. This communication should not be construed as an investment recommendation or advice, or as an offer to sell, or the solicitation of an offer to buy an investment. Offers to sell, or the solicitation of offers to buy any security can only be made through official offering documents, such as a subscription agreement and a private placement memorandum, that are generally produced by the sponsor of the investment opportunity (the “Offering Materials”).  Before making an investment decision with respect to any investment on the Marketplace, potential investors are advised to carefully review the Offering Materials. You should consult your own advisers prior to using the Marketplace.

 

Information in this communication, including information regarding targeted returns and investment performance, is provided by the sponsor of the investment opportunity and is subject to change. Forward-looking statements, hypothetical information or calculations, financial estimates and targeted returns are inherently uncertain. Such information should not be used as a primary basis for an investor’s decision to invest. Investment opportunities on the  Marketplace are speculative and involve substantial risk. You should not invest unless you can sustain the risk of loss of capital, including the risk of total loss of capital.

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