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Real Estate Risk-Adjusted Returns & Other Potential Risks

A risk-adjusted return is a measure that puts returns into context based on the amount of risk involved in an investment. In this article we walk you through a detailed process for estimating relative risk-adjusted returns across various commercial real estate investment opportunities. After completing this article you should have a better understanding of how risk and returns vary in competing investments, as well as an appreciation of how many times the investment with the highest IRR may not always offer the best risk-adjusted return.

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Other articles pertaining to risk:

Real Estate Investment Strategy: Four Categories of Risk & Reward

Top 10 Sources of Risk in Real Estate Investment Deals

The Real Estate Development Process: Understanding the Risks and Milestones

Assessing Real Estate Investment Risk Using Debt Service Coverage Ratios