The benefits of commercial real estate ownership are many: cash flow from rental income, tax shelter through depreciation, potential appreciation in value, tax deferral through a 1031 exchange and others. Along with the benefits there are certain risks associated with real estate ownership as well. One of the biggest risks is the potential for the property’s tenants to default on their lease. This can cause cash flow to be interrupted and can be a big problem, particularly if there is debt on the property.
In addressing this potential problem, we specialize in providing interested buyers access to some of the most conservative and safest income-producing real estate investments available: federal government leased buildings. These properties enjoy all of the benefits of real estate ownership, but also protect against potential tenant default risk. Additionally, professional property management is in place so the owner does not have the responsibilities of managing the property. These properties are leased to various departments of the United States government and are generally characterized by the following:
- Long-term (10 – 15 years) leases.
- Stable monthly income.
- Minimal default risk as the leases are direct obligations of the U.S. government.
- Newer buildings with little or no deferred maintenance.
- Potential rent escalations during the lease term.
- Professional property management.
For the investor who is interested in a conservative real estate investment that offers long-term, uninterrupted cash flow, a government leased property is worthy of consideration.