Stock Market vs. Commercial Real Estate
What’s the Better Investment?
CRE Offers Compelling Yields Versus Alternatives
- Returns vary wildly across the investment landscape – Real estate and stock market most popular
- Private equity funds, REITs, partnerships and direct ownership offer variety of CRE investment options
- CRE Beats the Stock Market Over the Last 20 Years
- Stock market outperformed in 2019 – total return of 26%, one of the strongest years on record
- On a long-term basis, however, real estate wins
- The 20-year total return on a $1M investment
- Stock Market: $2.7M (+174%)
- Commercial Real Estate: $4.8M (+377%)
Stability, Leverage, Asset Options – Key CRE Benefits
- Real estate less volatile compared to the stock market
- Ability to source debt boosts leveraged returns
- The broad range of sectors offer investors options
*Commercial real estate total return includes apartment, retail, office, & industrial properties $1 million & greater; includes non-leveraged weighted average returns on property price appreciation & cumulative cash flow S&P 500 total return based on price index appreciation & cumulative dividends (dividends not re-invested) Sources: Marcus & Millichap Research Services, CoStar Group, Inc., Real Capital Analytics, Standard & Poor’s*
Randolph is a Multifamily Investment Sales Broker with eXp Commercial servicing Multifamily Buyers and Sellers in the Greater Chicago Area.