Ari Rastegar is a veteran real estate investor who says he was underwhelmed when analysts for Morgan Stanley predicted that commercial real estate prices in the United States would see zero percent growth during 2016. Analysts for the financial services giant said that the income from commercial real estate properties would need to rise to help investors maintain their returns.

“First of all, [they’re] wrong,” Ari Rastegar stated flatly. “It is going to grow. And to talk about it – about real estate – and I assume what he’s saying is that he’s talking about on either a global level, or a United States level, or some of this broad statistic – well that’s a total misnomer in our business. Because we go in and we analyze markets by – maybe you talk about a state, you talk about a city – but real estate values – look at Manhattan as an example, which is not the way that you’d gauge all real estate – the values of real estate can change by a block. They can change by a street.”

In commercial real estate, he said that properties must be analyzed on a case-by-case basis. “I can look at the city of Phoenix, Arizona, that got completely destroyed due to the recession. So in terms of growth, it dropped double digits. But there are plenty of properties in Phoenix, Arizona – at the right price – that were still incredibly valuable. The last thing I look at as a real estate investor is appreciation. You know why? Because I have no control of it. What I have control over is, what is the current cash flow it’s yielding? What’s the occupancy there? How can I lower operating expenses? And can I buy it at a discount-to-replacement cost? If it happens to increase in value, in the ephemeral appraisal world – great. Professional investors don’t look at that.”

Even if the Smith Barney analysts are correct, and that commercial real estate will not grow at all during 2016, there are profits to be made. “We can still make a fortune by buying things for pennies on the dollar, and just letting them come back to zero.”

Ari Rastegar is the founder and CEO of Rastegar Capital, a commercial real estate investment firm based in Dallas.

To Learn More About Ari Rastegar Visit At : https://vimeo.com/arirastegar

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