A good return on commercial real estate investment depends on various factors, including property type, location, and market dynamics. According to Excelsior Capital, the average annual return on commercial real estate investments is around 9.5%, according to the S&P 500 Index. This rate can vary widely depending on the asset class and other investment specifics. You can read more about this on Excelsior Capital’s website: What is a Good Return in Commercial Real Estate?.
Matthews.com also discusses that there isn’t a universally accepted “good” ROI figure for commercial real estate, but an annual ROI of approximately seven percent or higher might be considered favorable. This figure aligns with the average yearly inflation-adjusted return of the S&P 500 index. For a more comprehensive understanding, visit Matthews’ detailed explanation: What is a Good ROI For Commercial Real Estate?.
These resources emphasize that while there are benchmarks and averages, the determination of what constitutes a “good” return is subjective and must be evaluated in the context of each investor’s goals, risk tolerance, and the specific characteristics of the property and its market.