Commercial real estate is a good investment for income not, as most investors believe, rising property prices, according to a new study.
Over the course of a seven-year holding period, apartments and industrial, office and retail space all generated unlevered returns in the roughly 7% to 9% range, according to a new study by Mark Eppli, a professor of finance at Marquette University, and Charles Tu, a professor of commercial real estate at the University of San Diego. The study was commissioned by the National Multifamily Housing Council Research Foundation.
But most of those returns came from the income generated by the property, not capital appreciation, which measures the value of the property over time but subtracts money spent on upgrades.
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