The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful:
Derisking commercial retail property while looking to invest really takes quite a bit of your own judgement, often gained through wisdom and experience in the investor market. Being thorough in your due diligence, accepting the help of a mentor or partner, and taking what you learn can help you to derisk any investment that you make. Textbook learning can help as well in building a well-rounded informational foundation.
Richard Wilson: How can somebody derisk a commercial retail property while they’re looking to invest in one? Like, when you look at investments in this space, you talked earlier in this interview series about conducting thorough due diligence, so I’m sure part of derisking is part of that due diligence process, but how else do you look to derisk your investment dollars going to work?
S.L. Van Der Zanden: Definitely be thorough on the due diligence, find someone you can partner with or mentor. That experience and wisdom you get from doing this just accumulates every day is hard to get out of a book. Although an idea of a book I highly recommend, by Peter Lineman out of Wharton called Real Estate Finance and Opportunities or something, you can’t miss it; it’s one of the most popular text books. If you read that and understand that you really have a lot of the fundamentals down. So it’s accepting that’s complicated, there’s never a clear cut answer, it’s a judgement call at the end of the day.