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Real Estate Asset Classes for Commercial Investors

April 21, 2024/in Insights

Understanding Asset Classes can Help You Achieve Your Commercial Investing Goals As a commercial real estate investor, your success lies in being an expert in the intricacies of your field as well as the market. So, it’s important to understand all the commercial real estate asset classes, including the types of properties ripe for investment. […]

Top 5 School Credit Unions for Teachers

January 16, 2024/in Insights

Real Estate Asset Classes for Commercial Investors

April 21, 2024/in Insights

Top 5 School Credit Unions for Teachers

January 16, 2024/in Insights

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Real Estate Asset Classes for Commercial Investors

April 21, 2024/in Insights

Understanding Asset Classes can Help You Achieve Your Commercial Investing Goals

As a commercial real estate investor, your success lies in being an expert in the intricacies of your field as well as the market. So, it’s important to understand all the commercial real estate asset classes, including the types of properties ripe for investment. Each property type within the real estate asset class has benefits and drawbacks that should be considered in regards to your short-term and long-term investment strategies.

Below we take you through what an asset class is, the three major real estate asset classes, and the six property types within those asset classes. The goal here is to help commercial investors understand the benefits and the best time to invest in the various types of commercial real estate.

What is an Asset Class?

Investopedia defines an asset class as “a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset classes are thus made up of instruments that often behave similarly to one another in the marketplace.”

Examples of asset classes include:

Real estate
Stocks, mutual funds and other equities
Bonds and other fixed-income
Alternative investments (cash and equivalents, commodities, currencies, real estate and more)

The real estate asset class is broken into two categories: residential and commercial real estate, which are further broken down by property type and classification.

3 Classifications Within Major Real Estate Asset Classes

The major real estate asset classes are categorized by characteristics that define a property’s quality. The three major classifications range from Class A through C, with each letter grade representing a combination of factors including location, tenant income levels, potential growth and more.

The three major classifications are as follows:

Class A

Class A buildings are the highest quality properties in their market. They offer the best amenities. Such real estate has newly constructed or renovated buildings, top-ranked schools and wealthy residents. Due to such characteristics, the real estate is purchased and sold at the highest prices, thus tenants pay expensive rent rates. The competition to purchase such investment properties is high, and the properties offer a tight profit margin.

Class B

Class B properties are mid-tier investment opportunities. Typically, the buildings are older than 20 years, requiring renovations and ongoing investment. The market can be characterized as that of the middle class: quality restaurants and shops, and average school ratings all in a well-kept neighborhood. Class B real estate is considered a “value-add,” but comes with a higher risk than Class A. Profit margins are higher, and competition is lower.

Class C

Class C properties are typically older than 30 years, requiring many renovations. Although they can be purchased at a low price, the investment is deemed risky. However, if an investor is able to turn the building around, it can have excellent potential for profit.

Can Class B & Class C Become Class A Real Estate?

All properties can move up or down in classification. For instance, if Class A real estate ages to more than 20 years old and in need of several renovations, it can be downgraded to Class B. If a Class C property is extensively renovated and upgraded with the latest amenities and furnishings, plus is located in a desirable neighborhood, it has the potential to transition to Class A real estate.

6 Property Types Within Commercial Real Estate Asset Classes

There are six types of properties within commercial real estate asset classes:

Multi-Family Properties

Multifamily properties can be an attractive option for commercial real estate investors because they come with the built-in demand for housing. According to Equity Multiple, such investments are most appealing in supply-constrained markets.

Retail

Retail investments, specifically standalone retail stores, are typically the longest-running and most stable, providing long-term cash flow to investors, per Equity Multiple.

Office Buildings

Office buildings typically lend to long-term leases ranging from five to 10 years, resulting in stable returns and predictable cash flow. Such properties are most beneficial to investors during times of economic expansions as companies grow and look to add more office space.

Hospitality

According to Equity Multiple, the hotel sector can provide outsized returns in growing economies. Additionally, the leisure travel and business activities areas can lead to demand for new hotels.

Industrial

Similar to retail, industrial real estate provides some of the most stable returns on the market due to long-term leases and low overhead costs. The property type is most attractive when the manufacturing sector experiences growth.

Development

Although development properties are the riskiest investment opportunities available, they have the potential to provide the highest returns—when done right.

Real Estate Investing Classes

While this introductory article is important in understanding real estate asset classes in the commercial market, investors should continue their education with real estate investing classes. Here are several real estate investing courses you should look into:

AVANA CUSO Provides Loans for All Commercial Real Estate Asset Classes

AVANA CUSO partners with credit unions and brokers to provide commercial real estate loans for projects of all asset classes, including retail, multi-family housing, office buildings, self-storage facilities, educational institutions and much more. Our CRE loan products range from $2 to $25 million with terms of five to 10 years and amortization of up to 30 years.

Top 5 School Credit Unions for Teachers

January 16, 2024/in Insights

As a new school year commences, it’s the perfect time to focus on how educators are appreciated and supported. School credit unions are specialized financial institutions that do both in truly value-added ways. By joining one of these credit unions, teachers gain access to more personalized services and products that can better meet their financial needs more so than other standardized financial institutions.

Since school credit unions are not-for-profit organizations, they have a mission of serving their members with the best rates, solutions and services possible, all while giving back to the local community’s education system.

These credit unions are able to offer such state-of-the-art, specialized services by partnering with a seasoned credit union service organization (CUSO), such as AVANA CUSO. For decades, AVANA CUSO has been partnering with credit unions across the nation to diversify CUs’ lending portfolios and better support members.

Here are some of the top school credit unions that cater their services to teachers across the United States.

1. SchoolsFirst Federal Credit Union

SchoolsFirst Federal Credit Union was founded in 1934 and is dedicated to serving California school employees and their families. In fact, they’re the largest credit union in the state and have been recognized by Forbes as the number one Best-In-State Credit Union in California. SchoolsFirst FCU is committed to offering lower rates on loans, higher rates on savings and low-to-no-fees for members.

Plus, they are actively involved in their community through events, donations, scholarships and financial literacy programs.

2. Teachers Federal Credit Union

Based out of Long Island, New York, Teachers Federal Credit Union (TFCU) has been around for more than seven decades and specializes in auto loans, mortgages and credit cards for its members.

Originally, TFCU started as a group of Long Island educators but has now grown to more than 420,000 members across the country. So while it’s not strictly a credit union for teachers anymore, it still offers incredible perks to members, such as its Smart Checking account that earns 14x the national average in interest.

3. Apple Federal Credit Union

Apple Federal Credit Union serves teachers and members of the community in Northern Virginia.

With a variety of personal and commercial banking services, they also offer exclusive perks for educators. These include getting paid up to two days early, educator lines of credit, mortgage programs, credit cards, savings accounts, retirement plans and Summer Pay accounts that help teachers plan for the months when they’re not receiving paychecks.

4. Gulf Coast Educators Federal Credit Union

Based in Texas, Gulf Coast Educators Federal Credit Union serves the financial needs of educators and school district employees across the state. Specifically catered to the needs of educators, their products and service offerings include specialized savings accounts, investment accounts, loans, CDs, credit cards and more.

5. Schools Federal Credit Union

Schools Federal Credit Union, another school credit union serving teachers in California, was founded in 1939 by a group of employees at the Los Angeles Unified School District (LAUSD). Some of their featured offerings include auto loans, HELOCs, CDs and credit cards, all at competitive rates.

Their mission has always been to provide members with financial products that help them save and earn money. As a result, they now have more than 15,000 members. To this day, they exclusively serve communities around the LAUSD as well as the Los Angeles Community College District (LACCD).

All these school credit unions empower teachers and school district employees with more personalized financial solutions and service. In addition, they are highly specialized institutions that support their local education system, which is equally valuable to the broader community.

About AVANA CUSO

Established in 1998 and headquartered in Simi Valley, CA, AVANA CUSO is one of the most seasoned credit union service organizations (CUSO) focused on commercial lending. For decades, we have partnered with credit unions across the country to offer competitive and collaborative loans. We also uniquely support and guide our partners through the entire lifecycle of our loans. AVANA CUSO is a proud member of the AVANA Family of Companies.

About us

AVANA CUSO is one of the most seasoned credit union service organizations (CUSO) focused on commercial real estate. Established in 1998.

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Half Sized Blog Element (Multi Author Style)

Real Estate Asset Classes for Commercial Investors

Top 5 School Credit Unions for Teachers

Real Estate Asset Classes for Commercial Investors

Top 5 School Credit Unions for Teachers

Full Sized Blog Element (Big Preview Pic)

Real Estate Asset Classes for Commercial Investors

Understanding Asset Classes can Help You Achieve Your Commercial Investing Goals

What is an Asset Class?

3 Classifications Within Major Real Estate Asset Classes

Can Class B & Class C Become Class A Real Estate?

6 Property Types Within Commercial Real Estate Asset Classes

Real Estate Investing Classes

AVANA CUSO Provides Loans for All Commercial Real Estate Asset Classes

Top 5 School Credit Unions for Teachers

1. SchoolsFirst Federal Credit Union

2. Teachers Federal Credit Union

3. Apple Federal Credit Union

4. Gulf Coast Educators Federal Credit Union

5. Schools Federal Credit Union

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