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Millionaires See Real Estate as Top Investment for 2014
Bloomberg, February 2014

U.S. millionaires see real estate as the top alternative-asset class to own this year, according to Morgan Stanley.

About 77 percent of investors with at least $1 million in assets own real estate, according to a survey released today by the New York-based investment bank’s wealth-management unit. Direct ownership of residential and commercial properties was the No. 1 alternative-investment pick for 2014, with a third of millionaires surveyed saying they plan to buy this year. Twenty-three percent said they expect to invest in real estate investment trusts, the second-most popular choice.

Wealthy investors are turning to a rebounding real estate market as fixed-income yields remain historically low and equities surge. U.S. commercial-property values rose 8 percent in the 12 months ended Jan. 31, and have jumped 71 percent since hitting their post-recession bottom in 2009, research firm Green Street Advisors Inc. reported today. The S&P/Case-Shiller index of home prices in 20 cities is up 24 percent from its 2012 low.

“After a year where the Standard & Poor’s Index rose 30 percent, some millionaires are moving money out of traditional, long-only strategies to find outperformance, and turning toward alternatives such as real estate and private equity,” said Gary Kaminsky, a vice chairman at Morgan Stanley Wealth Management in New York. “Sophisticated, high-net-worth investors are much more concerned about losses.”

Collectibles ranked as the third-most-popular alternative-investment choice this year, with 20 percent of millionaires saying they planned to buy, followed by private equity at 19 percent and precious metals at 16 percent.


Interest Rates, 2014
Marcusmillichap.com Enews, February 2014

Wealthy investors see stocks getting expensive and interest rates staying stable or even declining over the next couple of years, Kaminsky said in an interview at a conference for Tiger 21 investors last week in Scottsdale, Arizona. That’s why they are looking more closely at alternatives including real estate for returns and income, he said.

Tiger 21 members, who have at least $10 million in investable assets, increased their average allocation to real estate last year to 21 percent as of the fourth quarter from 19 percent in the first three months of 2013, according to a separate study released by the New York-based group last month.

Will Ade, a Tiger 21 member, said real estate is a particularly attractive investment as stocks show vulnerability in 2014. The S&P 500 has fallen more than 4 percent this year, while developing-country stocks have tumbled on concern that the outlook for economies is worsening.

What Headlines Will We Likely See in 2014?

Expect to hear more about secular growth markets driven by the evolving tech, energy, and creative industries. Expect to read about increasing volumes of financing activity sparked by maturities (2014 is the beginning of the three-year tidal wave of maturities) and increased purchase activity. Expect to hear more about the housing recovery, blue chip land transactions, and housing-related plays in retail.

The US commercial real estate recovery is broadening. The confluence of these positive trends creates a compelling investment environment. Seize The Day!

Why Apartments?
Apartments are an extremely resilient secured investment. REITs have outperformed the stock market year after year.
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Latest News
Millionaires See Real Estate as Top Investment for 2014
Published 2/2014

Interest Rates for 2014
Published 2/2014
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About Us
Providence Investments is a privately held investment firm focused on stable, income producing multi-family opportunities in emerging U.S. markets. We target high yield passive cash flow and long term capital appreciation through strategic acquisition and superior asset management. More »
 
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Providence Investments
29 Olmsted Street
Birmingham, Alabama 35242
Call us anytime at 205-705-1370 or fill out our online form here.
 
 
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