Despite the overall stock market pushing new record highs, some investors are losing billions of dollars. Where did they go wrong? How can we invest smarter? What is the downside protection when a stock crashes and goes bust? Nothing. According to Richard Crenian, investors are much better off looking into commercial real estate. If an investor has the available funds to investment in real estate, Richard would advise them to chose a commercial real estate property over a residential property.

Commercial Real Estate

Real estate investors can fare much better – especially in Canada. Although real estate asset values can fluctuate, they offer a tangible asset which can be held onto until better times. Income producing real estate can be even safer, as fluctuation in paper valuations are not as important when consistent cash flow coming in.

The exception to this may be when rents and demand evaporate and over-leveraged speculators with too much debt can’t cover their expenses. This is one risk some have been fearing in residential real estate in red hot destinations like Toronto. Note that a new bill being introduced aims at closing exemptions from rent controls, which could severely limit the ability of condominium landlords to increase rents.

For those investors seeking safer positions with more growth potential, strong yields, and great downside protection, it may be worth looking at some types of commercial real estate in Canada. Specifically, among local shopping plazas in Western Canada which may offer value-add opportunities and can be acquired with equity partners instead of personal debt.

In Conclusion

According to Richard Crenian, most regular investors don’t want to lose that type of money, nor have their money managers making those types of big bets with their money. Given the current stock market, and some residential real estate trends, more investors may seek the security and consistency that income-producing commercial real estate can provide.