how-much-money-do-I-need-to-start-investing-in-commercial-real-estate

How Much Money Do I Need to Start Investing in Commercial Real Estate?

We frequently have conversations where people tell us, “I want to start investing in commercial real estate, but I’m not sure if I have the capital.”

How Much Money Do I Need to Start Investing in Commercial Real Estate?

We frequently have conversations where people tell us, “I want to start investing in commercial real estate, but I’m not sure if I have the capital.”

It’s true that investing in commercial real estate typically requires more capital than residential real estate, because the properties are generally larger and more expensive.

These types of investments also tend to require more due diligence — like financial analysis, property inspections, and tenant evaluations — which can add to the investment costs.

That being said, investing in commercial real estate can offer the potential for much higher returns than residential investments. Because of the higher amount of capital and experience required, many individuals will choose to invest with a trusted sponsor who takes care of all back-end operations.

Choose Your Investment Vehicle

Keep in mind that different types of commercial real estate investments will have different investment minimums, as well as different benefits and drawbacks. These investment vehicles include:

Direct Ownership: This involves purchasing a commercial property outright or with partners and managing the property yourself or hiring a property management company.

Real Estate Investment Trusts: A REIT is a publicly traded company that owns and manages income-generating real estate assets. Investors can buy shares in the REIT to gain exposure to commercial real estate without owning the underlying properties.

Private Equity Funds: Private equity funds pool capital from multiple investors to acquire and manage commercial properties. These funds may have specific investment strategies, such as value-add or opportunistic investing. They may also have a minimum investment requirement.

Syndication: Real estate syndication involves pooling capital from multiple investors to acquire and manage a commercial property. A sponsor, or lead investor, typically manages the property on behalf of the syndicate.

Real Estate Crowdfunding: Crowdfunding platforms allow individual investors to invest in commercial real estate projects alongside other investors. These platforms typically have lower minimum investment requirements than other vehicles.

Joint Ventures: Joint ventures involve partnering with other investors or real estate firms to acquire and manage commercial properties. Each partner contributes capital and expertise to the venture.

As you’re choosing your investment vehicle, make sure to consider factors beyond just the investment minimum. The best vehicle for you will depend on a variety of factors, including your risk tolerance and your specific investment goals.

Investment Requirements for a Real Estate Syndication

Many investors are drawn to real estate syndication because it allows them to have equity in real estate without the added hassle of sourcing deals or managing the properties.

The amount of money required to invest in a real estate syndication will depend on the specific firm you invest with and the details of the specific deal. Some firms have minimum investment requirements of $50,000, while others have minimums as high as $1 million or more.

Although it depends on the specific syndicator and investment opportunity, many commercial real estate syndicators also require investors to be accredited.

Accredited investors are individuals with an annual income of at least $200,000 ($300,000 for joint income) for the past two years or a net worth of at least $1 million, excluding their primary residence, according to the Securities and Exchange Commission.

Want to find out if you’re accredited?

Before investing in any syndication, it’s helpful to consult with a financial advisor or attorney who can help you determine the appropriate strategy for your unique circumstances. You should also make sure to consider the fees and expenses associated with any investment, such as management fees and transaction costs.

At Excelsior Capital, our investment minimum is $50,000 per offering. If you’re interested in learning more about our investment opportunities, please fill out this form to get in touch.

Previous Articles

the-ultimate-guide-to-commercial-real-estate-investing

The Ultimate Guide to Commercial Real Estate Investing

Learn everything you need to know to assess the benefits of a commercial real estate investment and make the best decisions to get started.

One Big Beautiful Bill What It Means For Your Real Estate Portfolio

One Big Beautiful Bill – What It Means for Your Real Estate Portfolio

For real estate investors, especially high-net-worth individuals, this bill introduces enhanced tax incentives, including 100% bonus depreciation and extended Opportunity Zone benefits.

Secondary Market Momentum Industrial Assets as Institutional Goldmines

Secondary Market Momentum: Industrial Assets as Institutional Goldmines

As institutional investors search for alpha in an increasingly competitive real estate landscape, secondary markets are emerging as strategic destinations for industrial investment.

Navigating Interest Rate Uncertainty Strategies for Institutional Real Estate Joint Ventures JVs

Navigating Interest Rate Uncertainty: Strategies for Institutional Real Estate Joint Ventures (JVs)

The Federal Reserve’s 2025 policy will balance economic growth and inflation control. Factors influencing policy include tariff-driven inflation…

Trumps Tariffs in 2025 A Game Changer for Industrial and Shallow Bay Real Estate

Trump’s Tariffs in 2025: A Game Changer for Industrial and Shallow Bay Real Estate?

As the U.S. economy adapts to a broad round of tariffs under the Trump administration in 2025, industrial (bulk and shallow bay) real estate are poised for significant changes.

Emerging Trends in Real Estate Investment for Institutional Portfolios

Emerging Trends in Real Estate Investment for Institutional Portfolios

As the first few months of 2025 have shown, the real estate investment landscape for institutional portfolios is undergoing significant transformation.

Tax Season Preparation for Real Estate Investors

Tax Season Preparation for Real Estate Investors

Whether you’re an individual filer, a business owner, or managing investments like real estate, proper preparation can help you maximize deductions and stay ahead of key deadlines.

From Challenge to Opportunity 2025 Commercial Real Estate Outlook

From Challenge to Opportunity: 2025 Commercial Real Estate Outlook

As we move into 2025, investors are entering the new year with cautious optimism. While the last two years have presented challenges, there’s a growing sense…

Why Industrial Outdoor Storage IOS Is the Next Big Trend in Commercial Real Estate

Why Industrial Outdoor Storage (IOS) Is the Next Big Trend in Commercial Real Estate

The Industrial Outdoor Storage (IOS) asset class has rapidly emerged as a key player in 2024. With a market valuation of $200 billion…

Excelsior Capital

A real estate private equity firm that owns and operates high quality multi-tenant office assets in emerging secondary markets.

Interested in learning more about Excelsior's investment opportunities?

Excelsior Capital

104 Woodmont Blvd, Suite 120
Nashville, TN 37205

investors@excelsiorgp.com

Disclaimer: Under no circumstances should any information presented on this website be construed as an offer to sell, or solicitation of an offer to purchase any securities or other investments. This website does not contain the information that an investor should consider or evaluate to make a potential investment. Other materials related to investments in entities managed by Excelsior Capital are not available to the general public.

Share This