Not All Commercial Real Estate Carries the Same Risk When investors compare commercial real estate, they often focus on one thing. Potential returns. I think there's a better place to start. Risk. Every asset class performs well when the economy is strong. The real test is how it performs when conditions become difficult. Here's how I'd generally rank major commercial real estate asset classes from lowest to highest risk: Mobile Home Parks Self Storage Industrial Multifamily Neighborhood Retail Hotels Office This isn't a ranking of which assets can produce the highest returns. It's a ranking of which businesses I believe are more resilient over multiple market cycles. The lower-risk assets tend to share a few characteristics: • Durable demand • Essential services people need regardless of the economy • Predictable cash flow • Multiple ways to create value through operations The higher-risk assets often depend on factors that are harder to control: • Consumer spending ...