Publications

- October 1, 2013: Vol. 25, Number 9

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Stuck in the middle: Commercial real estate investing in an unequal economy

by Christopher Macke

1   Lost in all the emotion and politically charged rhetoric surrounding income inequality are the implications for investors and their investments. Commercial real estate owners, investors and lenders would be wise to set the emotions and rhetoric aside, instead examining the implications of a shrinking middle class for their buildings, portfolios, balance sheets and investment strategies as other companies have done. For example, responding to the topic of a shrinking middle class, Procter & Gamble’s group president of North American business was quoted in a 2011 Wall Street Journal article as saying, “It’s required for us to think differently about our product portfolio.” Commercial real estate owners, investors and lenders would benefit from doing the same. Just as geographic, industry and tenant concentration levels provide valuable risk-related insights, assessing exposure levels to the various income

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