What is fractional commercial property investing?

In almost every market, commercial property has belonged to a small group of people who could write a cheque for millions. A single shop on a high street or a floor in a Grade-A office tower is simply out of reach for a salaried professional, however well they earn.

Fractional investing changes the entry ticket, not the asset. A property is purchased by a dedicated legal entity, and ownership of that entity is divided into a large number of equal shares. When you invest, you buy some of those shares. If a property is worth $4 million and you invest $40,000, you own one percent of it and receive one percent of everything it earns.

This is different from a mutual fund or a REIT. You are not buying a slice of a blended portfolio managed at someone else's discretion. You choose the specific property, you can read its lease and valuation before investing, and your returns come from that property alone.

The trade-off is that the manager handles everything operational: sourcing, legal checks, the purchase, tenant management and, eventually, the sale. In return the manager charges fees, which should always be published in full before you invest.

A good rule of thumb: if you can not see the tenant, the lease term, the valuation and the complete fee schedule, you are not looking at a serious fractional property platform.