• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Navigating volatility with confidence

FNRP favors “necessity-based investing.” In challenging times, consumers will cut back on just about everything but food, housing and discount staples. That’s why FNRP specializes in shopping centers anchored by big grocery chains as well as industrial commercial properties and multi-family apartment buildings close to where people shop and work.

Its strategy has a proven track record of helping investors preserve their capital and grow their wealth throughout volatile times. With the arrival of COVID in March 2020, FNRP acquired essential operating properties yielding 125 to 200 basis points above normal pricing. When markets normalized in 2022, the company was able to sell close to $120 million in real estate at stabilized yields that produced gross internal rates of return of more than 19%.

The company sees a cyclical pattern in buying opportunities. FNRP states that in addition to 2020, the years 1991, 2001 and 2009 all gave buyers the chance to profit handsomely — ’09 in particular marked the height of the Great Recession and a time when investors of all kinds failed to capitalize on the deals available.

To that end, FNRP actively searches the country every day for the best retail and multi-family properties. They acquire them either directly or through partnerships with what the company considers best-in-class local sponsors.

How to get a free $10 to invest in your future

An app called Acorns automatically rounds up purchases made on your credit or debit card to the nearest dollar and places the excess "change" into a smart investment portfolio. You get $10 immediately from your first investment.

Get $10

Retail real estate’s returns

Another reason commercial real estate is so compelling right now: Very few shopping centers have been built since 2007, according to FNRP research. Considering recent spikes in the cost of building materials, labor and land, you've got a situation in which FNRP has a lot of pricing power when negotiating with tenants.

FNRP’s team has leased more than 500,000 sq. ft. over the past 12 months at close to double-digit rent increases over expiring rents. Meanwhile, high interest rates have pushed purchase prices lower — allowing heavy hitters like FNRP to buy better-quality properties at a bargain.

Across the spectrum of retail — from simple single-tenant properties to super regional malls spanning hundreds of thousands of square feet with multiple anchor tenants — FNRP points to solid total annualized returns. Looking at data from the National Real Estate Council of Fiduciaries, retail income and appreciation add up to 5.4% over the last 10 years; 8.0% over the last 20 years and 8.6% dating back to 1977.

Multi-family market strength

When you look at multi-family housing in 2023, an entirely different set of dynamics demands notice.

FNRP’s research highlights the glaring imbalance between household formation and the lack of housing supply. Indeed, the firm points out this situation has persisted for more than 15 years, creating a lasting population of “renters by necessity” who lack other affordable housing options.

Broken down by income and appreciation, the National Real Estate Council of Fiduciaries has calculated total annualized returns on apartment investments of 7.1% over five years, 8.1% over 10 years, 8.2% over 20 years and 8.6% going back to 1984.

Statistics collected by FNRP that date to 1990 tell a compelling story. Over that period, the total number of U.S. households has jumped more than 40% to roughly 130 million last year. By contrast, single-family home construction plummeted during the Great Recession and has never fully recovered. Housing starts suffered another 20% drop since the onset of the pandemic.

With no change in sight, FNRP expects growing demand for rental apartments will permit significant rent increases that will keep pace with and often exceed inflation.

This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Get Started

Don’t flinch

To navigate today’s challenging markets, First National Realty Partners stresses the importance of looking beyond intimidating headlines about inflation, corporate job cuts and the prospect of a recession.

Dire forecasts demand attention but they can also distract from opportunities that pop up despite — and sometimes because of — market turmoil. And no matter what happens, you can expect continuing demand for necessity-based real estate, which FNRP watches closely in the multi-family and retail sectors.

Accredited investors who see merit in this strategy and the company’s historical performance can take a look at its portfolio of properties, anchored by giants like Walmart and Whole Foods. Today’s buying opportunities, FNRP concludes, are robust — perhaps even unprecedented — so make sure you’re keeping your eyes open, too.

Trade your favorite stocks any time

Investing doesn't have to be hard. Robinhood is the only place you can trade stocks, options and ETFs 24 hours a day, 5 days a week, all still commission-free. Start building your portfolio with as little as $1.

Get Started
Lou Carlozo Freelance writer

Lou Carlozo is a freelance contributor to Moneywise.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.