I read an update from the 1031 exchange specialist, Steve Rosansky, regarding increased inflation in the near future and using commercial investment real estate as a hedge.
We’re starting to see the signs of increased inflation with commodity prices up about 7% in the last year and food prices up 20% in the same period. Now with gas prices on a rapid run up, this is something to consider in the near term future.
Real estate values tend to rise at a rate very close to the rate of inflation. A study of the correlation between various asset classes and inflation between 1978 and 2008 shows that real estate returns have the highest correlation.
For more see attached.