Commercial Property Owners Focus On Recycling Capital Into Better Performing Properties In Wake Of Recession, Low Cap Rates

St. Petersburg, Fla. --- Many of the most astute commercial property owners and investors today are focused on recycling their capital---taking advantage of lower cap rates to dispose of non-core assets and use the proceeds to acquire better-performing properties, says Rachel Elias Wein, AIA, founder and principal of WeinPlus Real Estate Advisory Services in St. Petersburg.

In the bargain, they are trimming their operating costs and selling off lower quality assets to gain fewer but more profitable properties.

Wein said capital recycling is a smart investment move as long as cap rates remain low.

“The advantages are two-fold,” Wein said.

“Higher quality assets generate lower capital costs,” she said. “Higher quality assets offer better spreads, which are discounted by the fact that the investor paid more for these assets. Higher quality assets also save management costs,” Wein added.

“It takes fewer resources internally to manage higher quality assets. It might take 10 people to manage 10 average quality properties and fewer than five to manager five very high-quality properties. Companies are able to be more efficient internally with their resources,” she explained.

Wein said WeinPlus Real Estate Advisory Service partners with its clients — including some of the largest public and private real estate and retail companies in the country – to analyze portfolios and make recommendations to recapitalize, acquire or recycle capital investments.

“Recycling is the growing trend among the most astute owners,” Wein said.