Does Owning a Multi-Tenant Property Help Balance a Portfolio?

In this video, Joel, Principal Broker of NNN Invest, discusses if this type of property, multi-tenant, helps balance an investor’s portfolio.  

Joel states that owning a multi-tenant property can produce a higher return which helps to balance out risks that may be included within your portfolio.

Should I add this type of property to my portfolio, will it help? 

Joel believes that owning this type of property does help to balance a portfolio. He states that owning a multi-tenant property can produce a higher return which helps to balance out risks that may be included within your portfolio. You can blend the returns, such as, owning a single-tenant net lease property and owning a multi-tenant property.

What are typical cap rates for this type of investment? 

With the single-tenant property, there is typically a lower cap rate and you may not have to do much on a monthly basis versus a multi-tenant property that may have a higher cap rate with a higher cash flow potential. You can also invest in a retail value add property such as a shopping center with a syndicate sponsor. This option may have less cash flow initially on the front-end but may have more equity upside on the backend. With a few different types of retail properties, you can choose and possibly achieve stronger blended cash flows but a likely safer overall portfolio of investments. Joel suggests how to structure and balance a portfolio can depend on your individual goals, age in your lifecycle, how far away you are from retirement, and how aggressively you would like to grow your portfolio. All of these things come into play when you’re evaluating retail properties.

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