Since the Covid19 pandemic in 2020, economists and political figures have projected a seismic shift in the real estate market. With home prices up nearly 30% compared to just a year ago, mortgage rates have risen, resulting in an average monthly payment hike of nearly 50%. A home valued at $200k, can easily sell on the open market for double its price. The reason for the shift can directly be attributed to rising fuel prices, unstable commodity prices, and of course the conflict in Ukraine. On the other end of the spectrum; the commercial real estate sector is booming! For commercial real estate entrepreneurs like Luther Gales III, he foresees a positive turn in the economy. “The industrial sector forecast looks promising” states Luther Gales III as he browses through his portfolio of commercial properties.
Luther Gales III feels optimistic the residential real estate market will transition to a buyers’ market. With global uncertainty, the volatility of the market has driven home prices up in a time where many Americans are pinching their wallets to afford basic necessities. “We are experiencing times like never before,” explains Luther. The gap between residential and commercial real estate has never been farther apart than it is now. In efforts to jumpstart the economy, commercial real estate investors like Luther are seeing an uptick in land development and commercial real estate acquisitions. In major U.S. markets such as New York City, Chicago, Atlanta, Miami, Houston, and Los Angeles, banks and lenders have shelled out over $900 billion in commercial property loans since 2021. In just 6 months into 2022, the hotel sector has accounted for $50 billion in new loans. Commercial real estate will always maintain its intrinsic value.
The investment game is one with many risks; however, the rewards often yield lucrative results. Investing in commercial properties and land in the U.S. comes with its challenges – financing, volatility of the market, and regulations. In recent years, more investors are testing markets in foreign lands in lieu of securing sound investments that will never zero out. As with many commercial real estate investors, Luther has amassed a large portion of his portfolio through international acquisitions. “The benefit of investing in commercial real estate is the ability to diversify” speaks Luther on his decision to invest abroad. Commercial real estate investors can now focus on more opportunistic deals as a result of the recovery from the Covid19 pandemic. The current trend in the real estate market has yielded a result of foreign investors making acquisitions in the U.S.; however, entrepreneurs such as Luther Gales III have set their sights on discounted properties abroad. With the lift of travel restrictions in foreign countries, many commercial properties are in a fight to withstand the aftermath of the pandemic. The sentiment of private equity investors has begun to shift toward transactions to rescue and rebuild. In Asia, Germany, Europe and especially Dubai, the number of commercial real estate deals has tripled to astronomical heights. While a majority of investors are still in the “wait and see” mode, entrepreneurs like Luther have their foot on the gas.
As world real estate markets are expanding, Dubai has surged to the front of the line as an investment stronghold. Dubai o ers world-class infrastructure with the latest in state of the art advances and technology. Noted as the most populous city in the United Arab Emirates, Dubai is the ideal location for investments in tourism, retail mainframe, and the hospitality industry. Luther Gales III, a visionary of foreign markets, foreseen the Dubai boom years ago. Luther invested $3 million dollars on a prime plot of land in the downtown entertainment district in hopes of developing it into a hotel. Shortly after closing on the deal, Luther was approached by developers EMAAR with a deal to purchase the land for an astounding $8 million. With a 300% return on his investment, Luther knew he had found his niche in the market! Luther re-invested the proceeds from that initial deal into prime real estate in Dubai and continues to duplicate the process to this very day. Today, Luther’s real estate portfolio is appraised at an estimated $600 million (usd), expanding over 7 countries and 38 states in the U.S.
Whether stateside or abroad, Luther Gales III advises commercial real estate investors to, “get in, while the water is still hot”.
