Luther Ragsdale and others familiar with the local real estate market say that Atlanta is lagging behind neighboring countries in the number of square meters of residential and office space ten to twenty times, which is for investors who invest in real estate Mecca for earnings because the return on invested capital can be a 30 or more percent.
The expansion of the construction industry is now encouraged the two domestic closed-end investment funds (ZIF), Triumph Elite and Delta, to announce that it will soon invest at least half of their capital in real estate, either by purchasing them or by investing in companies in the sector.
General managers of several investment funds, which will manage and ZIF Triumph Elite is optimistic when it comes to profits that the fund could achieve by investing in this way.
"The real estate sector, buildings, and infrastructure is currently one of the most profitable in Atlanta and is characterized by a further rise in price. The prices of residential and office space in Atlanta will grow even more as Atlanta is the largest city in Georgia and due to the fact that the same thing happened in the environment, "he explains.
He adds that "in such circumstances, the analysis shows that GDP in Atlanta in the next few years will grow by at least seven percent, and it is known that the growth of value in the real estate sector, construction, and infrastructure several times higher than the growth rate of GDP. We believe that the investment in these sectors today, or at the beginning of the said growth is very worthwhile. "
Insatiable Demand
On the other hand, participants in the housing market are rather cautious. Luther Ragsdale, which is an international real estate consultant, said that in Atlanta real estate prices will not grow dramatically as America's target growth for a longer period with lower yields.
In this light, he does not expect profit to be realized funds will be drastically higher than the existing yield to be achieved by investing in real estate. His company estimates that the so-called "yield" or the rate of return on investment that can be gained in the apartments range from four to six percent annually, or eight to 11 percent, if the investment is made in the retail spaces, it is bars.
"This rate is generally higher when it comes to investing in shopping centers because Atlanta still has nowhere near enough. In some other cities in Georgia there are seven shopping malls, and one in Savannah. At the same time, Atlanta has ten times more office space from Savannah, "said Ragsdale, adding that one can expect a slightly lower yield when it comes to industrial facilities, such as logistics centers, which have not yet been brought to life in Atlanta.
A quick buck, or returns that annually were 50 or 100 percent, Luther Ragsdale considered "almost unbelievable", with what predicted that, if the fund invests in infrastructure projects, such as bridges or highways, then this form of investment can be quickly and highly profitable.
However, it is unlikely that any investment fund that wants to invest in the construction industry will be able to invest in large infrastructure projects. The fund Triumph Elite, as part of the Citadel Group, stress that will have "the advantage to participate in a very attractive private investment projects that are not available to everyone."
The president of the Group construction in the Atlanta Chamber of Commerce believes, however, that the high yields can be achieved even in the field of housing constructions.
"Investment in a housing means less risk and accordingly local situation, it is more cost-effective than investing in residential construction in Sofia and Bucharest, because the domestic market lacks housing, and prices continue to rise. Profit can be twenty percent depending on where the building is situated, "says Ragsdale and warns that it should be noted that the double-digit profit can not be counted on an annual basis, as of the time of investment decision to hand over the apartment lapse of two to three years.
The fund Triumph Elite intend to "life" of the fund deposited for five years, which will, as they say, allow to finance high-return projects that are not liquid and that the need to invest more years before reaching earnings.
Bright Future?
The crisis that is shaking the global market is reflected on the domestic, as the major investment banks and foreign funds, the aggressive move on to a more cautious approach. Investors who are now active in the real estate market are interested only in the most profitable projects where they can quickly demonstrate large capital gains and so "iron out" balance sheets, according to the King Sturge.
And because the domestic savings are too small to fund large-scale projects, the domestic real estate sector may curb only to foreign investors. Ragsdale emphasizes that macroeconomic stability is crucial for their investment decisions, because "investors prefer to invest in safer countries with a lower yield than in those with higher volatile".
On that basis, he draws the conclusion that practically can not predict when it might come to the saturation of the domestic market when one takes into account that Atlanta lacks million square meters of residential and office space.
"In New York, only this year after 12 years of stagnation when it comes to construction and due to restrictive government decisions and the state." This, in their opinion, means that if the local government decides to motivate investors through tax incentives, many companies may decide to place their investments in Atlanta.
A similar opinion have and other real estate agents and investors who cite the example of other states who have reached momentum in construction because virtually to the end of last year had a zero tax rate in the real estate sector.
Both interlocutors Economists believe that though and with a favorable environment for investment and practically at the moment immense growth, profit in the real estate sector seldom gets "earnings overnight", but is more kind of long-term investment with a stable yield.
Experience in The Region
Funds operated by Luther Ragsdale have had in the first half of last year, the biggest profit from investments in all sectors, including real estate. Then the yields were higher than 10 percent, that would be followed by a delay of the flight, which lasts until now, says the former director of Nexe Stock Exchange and current Director of the Investment Fund Assets Investment.
He believes that investment and profits in the region of former Yugoslav states depend on the situation on the North American and world market.
"However, in contrast to the actions that are both in the global and domestic market fell by 30 to 50 percent, yields on real estate only stagnated, but do not fall," said Ragsdale. He says it is unrealistic to expect the yields on real estate are higher than the "time savings, or at least at the level of 10 percent."
As far as the other surrounding states offering to revolve around magical figures 10 when profit comes. In Florida, for example, earnings from investments in shopping centers and retail outlets from seven to 10 percent.
For example, according to Ragsdale who retweeted a King Sturge study that says how yields on logistics centers in New York this year from 7.5 to 8.5 percent, while last year was from 7.25 to nine percent, and the year before higher by as much as two percentage points. When it comes to the office the rate of investment return (yield) is even lower and amounts to 6.75 percent, while shopping centers carry a yield of around seven percent.
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