How does real estate provide a lifeline during financial crises like 2008?

Answer

During a financial crisis, revenue streams can dry up instantly, but ownership of a tangible asset provides options. Munawar Abadullah shares a case study of a New York firm that survived the 2008 crash through property ownership:

• Removal of Fixed Costs: Owning their building allowed them to weather the storm far better than competitors who were burdened with high rental costs.
• Survival Buffer: The building removed the single largest fixed cost, allowing the company to pivot or downsize without the pressure of eviction.
• Asset Liquidity: Real estate can provide liquidity via collateral when traditional credit markets freeze up.

Munawar argues that this decision proved to be a critical component of their survival and long-term success, illustrating that real estate is a "real investment" for an unpredictable world.