The combination of the new tax laws and legislation, in relation to the Wall Street scandals, has changed the way you should look at real estate investments. Taxes and exchanges are what I call "the Disneyland of real estate" because they are the fun and games, mostly games, that you play with your accountants to see how many tax dollars you can keep from parting with.
Now with the low tax rates, it isn't a bad idea to actually turn more conservative in your investments and pay taxes on your profits. With the fact that CEOs must sign the financial statements, many will opt to reduce risks, especially in real estate, where there is so much at the whimsy of the entitlement process.
Many REITs are already at their lows and should be checked under the philosophy of buy low and sell high. The stock market is so dependent on institutional investors, like pension funds, which pay no dividends, that they are divorced from the economy and become the greater game of risk-taking.
I was brought up as a research analyst where I had to try to quantify risks. I learned that many risks on new development are not dependably quantifiable. Even pro forma is often a "guesstimate."
In buying an existing building you can and should demand written proof of performance, insurance, taxes and expenses. Insurance is always going up (especially lately). Also check with the police to get a handle on crime in the area of purchase. If it's residential, be sure to check the ratings of all schools in the area.
In terms of investing in real estate, these are some additional caveats I suggest to reduce your risks:
Remember that "haste makes waste" and never was a saying truer than it is for real estate speculation or investment. Take your time and never be stampeded into a decision. Let it go to another party instead of losing your common sense and more.