The Advisor's Guide to Commercial Real Estate Investment.

Abstract

The Advisor's Guide to Commercial Real Estate Investment. David J. Lynn. The National Underwriter Company, 350 pages, 2014.It is easy to forget that real estate investment has many dimensions-and hard to squeeze all of those dimensions into a single volume. Understanding why and how to invest in commercial real estate; knowing how to choose a real estate investment advisor; grasping private market real estate and understanding how to make allocations to a portfolio of private investments; embracing public-market real estate, including both listed and non-listed real estate investment trusts (REITs); and becoming truly up-to-date on current market topics like green real estate and international real estate-all of this is a tall order to condense into a short book.But The Advisor's Guide to Commercial Real Estate Investment is made to order for this challenging task of portmanteau-like compression. In less than 400 pages, the text covers all of these investment topics, and more. David Lynn has divided these topics into discrete chapters, then parceled them out to just the right combination of real estate experts-mostly true real estate scholar-practitioners with at least several decades of experience in their investment areas-to write concise, businesslike, yet thoughtful treatments of the relevant investment topics. It may not be overstating the case to suggest that the Guide may embody as much essential real estate investment knowledge as has ever been assembled in one volume.The result is a type of book that is becoming increasingly rare: a work of great technical virtuosity that is nonetheless highly accessible to the general reader, or at least to the regular reader of real estate literature. The Guide is a type of book that is increasingly rare in another sense as well: it contains abundant charts and diagrams that visually depict otherwise opaque real estate data sets in a graphically appealing fashion also accessible to the general reader.The Guide consistently conveys large amounts of valuable real estate investment information, but highlighting some representative sections conveys the flavor of the book and summarizes the main points.WHYS AND HOWS OF COMMERCIAL REAL ESTATEIn Chapter 1, ''Why Real Estate as an Investment?'' David Lynn, Kevin White, Don Occhionero, and Ross Tieken set a straightforward tone at the outset, giving five main answers to the chapter title's question: (1) large investable universe, (2) high income returns, (3) low volatility, (4) diversification, and (5) inflation hedging. This chapter also emphasizes the importance of developing an investment policy statement to determine the investor's ability and willingness to take risk-really the motivating prologue to the remainder of the book.In Chapter 3, ''Investment Products and Strategies,'' Victor Galanog and Ryan Severino convey the spectrum of advanced real estate investment styles, including debt investments, whole mortgage investments, high-yield debt, commercial mortgage-backed securities (CMBS), core strategy, core-plus strategy, public real estate equities, value-added strategies, private equity strategies, opportunistic strategies, and international strategies. There are more options to suit any investment thesis here than many would imagine.Faye Beverett and Roy Schneiderman guide the investor through the all-important process of ''Choosing the Advisor'' in Chapter 5. The investor should evaluate potential advisors through written materials, in-person interviews with key advisor staff, and third-party assessments of the reputation of potential advisors. The chapter provides handy checklists for due diligence on prospective advisors.PRIVATE REAL ESTATEChapters 6-11 thoroughly explore private-market real estate. Real estate is being drawn more and more into the central investment universe, but the complexity of managing real estate as an asset relative to stocks and bonds always looms as a constraint. …