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Real estate syndications often target commercial properties and developments because these types of properties generally offer higher potential returns on investment compared to residential properties. Commercial real estate, including office buildings, retail spaces, and industrial properties, typically operates on longer lease terms, providing more stable and predictable cash flow. Additionally, commercial developments can present opportunities for value-add strategies, allowing syndication groups to enhance property performance through renovations or improved management.

The preference for commercial properties in syndications also stems from the ability to invest in larger projects that require significant capital, which would be difficult for individual investors to fund alone. This structure encourages pooling resources among various investors, thus facilitating the undertaking of larger transactions and developments that might otherwise be unfeasible.

In contrast, while residential properties can be part of a syndication strategy, they are often less favored for such investment models due to their generally lower returns. Luxury properties might appeal to specific niche markets but do not represent the broader investment strategy that syndications typically employ. Similarly, government-owned properties do not generally fall within the scope of syndication investments since they are not available for private investment in the same way as commercial properties.