DenisKarasyov
Where to Find Cash Flow?
09/24/2026

Where to Find Cash Flow?

Recent headlines surrounding US commercial real estate often raise concerns for international investors. Footage of empty office towers in New York or San Francisco and news of major retail bankruptcies create a challenging backdrop.

Elevated interest rates compound the problem. When borrowing costs exceed average cap rates, traditional office acquisitions can quickly turn into loss-making ventures with negative cash flow.

Yet this downturn affects specific property sectors rather than the entire market. While traditional office buildings and older retail centers adjust, real estate investors are redirecting capital toward asset classes insulated from remote work trends and broader economic shifts.

The Challenge with Traditional Office and Retail Properties

The widespread shift toward hybrid work structures represents a permanent operational change. Corporations continue to reduce leased footprints to manage overhead. As a result, office building owners face higher vacancy rates and pricing pressure to retain tenants.

Older shopping centers face similar headwinds as they compete with online retail platforms. With higher mortgage rates, debt service costs often eat up remaining net operating income.

Generating steady cash flow requires focusing on asset classes where demand does not depend on remote workers or online shopping habits.

Medical Office Buildings: Resilience to Remote Work

Medical Office Buildings (MOBs) remain one of the most resilient sectors in commercial real estate. In-person medical examinations, outpatient surgeries, lab work, and dental procedures cannot move to virtual formats.

MOB tenants typically include regional hospital systems, specialized medical practices, and outpatient service providers. These entities execute long-term leases ranging from 10 to 15 years.

Relocating a medical practice requires substantial capital to move specialized equipment and risks losing an established patient base. Consequently, medical office occupancy rates remain stable across economic cycles, with tenant renewal rates consistently exceeding 80%. An aging US population further drives demand for expanded healthcare infrastructure.

Self-Storage: Low Capital Costs and Pricing Flexibility

The self-storage sector offers strong risk-adjusted returns due to its streamlined operating model. Storage facilities consist of individual units leased to residents and small businesses for personal belongings, inventory, or seasonal equipment.

The main advantage of self-storage lies in low capital expenditure requirements. Unlike office spaces, storage units do not require expensive tenant improvements, carpet replacements, or complex building management systems between leases.

Demand for storage space stays consistent during both economic expansions and downturns. Life events such as downsizing, relocating, home renovations, or business restructuring create ongoing demand for temporary space.

In addition, self-storage relies on month-to-month leases. This short-term lease structure allows property owners to adjust rental rates promptly to keep pace with inflation rather than waiting for long-term leases to expire.

Multifamily Real Estate: Consistent Housing Demand

Residential rental properties remain a fundamental asset class for income-focused portfolios. High residential mortgage rates make homeownership less accessible for millions of American families, directing demand toward rental housing.

Class B and C multifamily properties serving workforce tenants display notable stability. Consumers can trim discretionary spending on travel or dining out, but housing expenses remain a primary financial commitment.

Investing in multifamily assets provides inherent diversification. While losing a major corporate tenant in an office building can eliminate a large portion of rental income, tenant turnover in a 150-unit residential complex has a minimal effect on total monthly cash flow.

Building a Resilient Portfolio

When evaluating opportunities across defensive real estate sectors, focus on these core fundamentals:

  1. Target growth markets with positive net migration and job creation, such as Sunbelt states like Texas, Florida, and North Carolina.

  2. Keep leverage conservative. Maintain loan-to-value ratios between 50% and 60% so high interest rates do not absorb net operating income.

  3. Review tenant credit quality. For medical office properties, prioritize assets anchored by established health systems.

Redirecting capital from traditional office spaces into medical offices, self-storage, and multifamily properties helps build an investment portfolio focused on predictable cash flow across market conditions.

This material is for general information only and does not constitute legal, immigration, investment, or tax advice. Program requirements and processing practices may change. Individual results depend on the applicant’s circumstances, visa availability, USCIS decisions, and project performance.

Denis Karasyov
Denis Karasyov

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