Private Software and AI vs. Commercial Real Estate Investing

An Investor Resource by Jason Criddle, Founder of SmartrHoldings

For decades, commercial real estate investing has been considered one of the safest and most reliable vehicles available. Office buildings, retail centers, warehouses, and multifamily properties have long served as cornerstones of institutional and private wealth. But markets evolve as time goes on. What once produced outsized returns eventually becomes saturated, competitive, and margin-compressed.

Today, commercial real estate investors are asking a new question:

Is commercial real estate investing still the best place to deploy capital, or are private software and AI investments becoming the superior long-term alternative?

This resource is designed to help investors understand how commercial real estate investing compares to private software and AI infrastructure, why certain real estate subsectors like data centers remain attractive, and why early-stage private software and AI platforms are increasingly outperforming traditional property investments.

Why Commercial Real Estate Has Become a Saturated Market

Commercial real estate investing is not failing, but it is no longer the growth engine it once was. Over time, capital has crowded into the space, compressing returns and increasing risk. When TV shows based around fix and flips flooded the market, so did people investing in the real estate sector.

Several factors have contributed to this saturation:

• Institutional capital dominance has driven asset prices higher.
• Competition for quality properties has intensified as the economic landscape has changed.
• Interest rate volatility has increased financing risk.
• Operational costs, taxes, and compliance burdens have risen.

Office and retail sectors have faced structural demand shifts… especially since most offices emptied after COVID.

In many metropolitan markets, commercial real estate has shifted from a growth investment to a yield preservation strategy. Returns often rely more on leverage, timing, and tax structuring than on organic appreciation. Which means, it’s not really a profitable investment as it is just a way to hold cash.

This does not mean commercial real estate has no place in a diversified portfolio. It means the easy upside is largely gone.

Where Real Estate Still Wins: Owning the Business Inside the Building

There is, however, an important distinction investors must understand; owning the real estate is not the same as owning the business operating within the real estate. And there is real upside when you do both. 

Historically, the greatest wealth creation tied to real estate has come not from the land itself, but from the businesses that occupy and monetize that land. Hotels, logistics hubs, industrial operations, healthcare facilities, and technology infrastructure generate far more value than the square footage they occupy.

This is why certain real estate categories still outperform.

Why Data Centers Are One of the Highest-Returning Real Estate Assets

Among all commercial real estate investment sectors today, data centers stand apart.

Data centers benefit from long-term enterprise leases, high switching costs for tenants, predictable recurring revenue, rapid demand growth driven by AI, cloud, and data storage, and a strategic importance to global infrastructure… especially as new technology is rapidly changing the corporate landscape.

Unlike traditional offices or retail, data centers are not discretionary. They are mission-critical assets.

At SmartrHoldings, our data center investments are built around this reality. Data centers represent a convergence of real estate and technology, where the physical asset supports a digital economy that continues to expand.

However, even data centers have limitations.

They require massive capital expenditure. They depend on power availability. They face zoning, permitting, and regulatory constraints. They still operate on fixed physical infrastructure.

This is where private software and AI infrastructure begin to surpass even the strongest real estate assets. If you own the building, the datacenter inside it, and the technology running on it, you are sitting on a proverbial gold mine.

Why Private Software and AI Infrastructure Outperform Traditional Commercial Real Estate Investing

Software and AI platforms share many of the same strengths as data centers, while avoiding many of their constraints.

Private software and AI investments benefit from:

• Near-zero marginal cost of scaling.
• Global reach without geographic limits.
• Rapid deployment and iteration.
• High operating margins; more than real estate, stocks, and oil and gas combined.
• Recurring subscription revenue.
• Data-driven network effects.

Unlike real estate, software is not limited by land, zoning, or construction timelines. A single platform can scale from hundreds of users to millions without acquiring new physical assets.

Real estate investors often refer to their investments as “doors,” but you can only fit so many tenants behind one door. Even in commercial real estate investing. Software doesn’t have this limitation.

This is why private software companies have produced many of the largest wealth creation events of the last two decades.

The Power of Pre-IPO Private Software Investing

Pre-IPO investing allows capital to enter a company before public markets inflate valuation. Historically, the majority of value creation occurs before an IPO, not after.

By the time a company goes public, institutional investors dominate ownership, growth expectations are already priced in, and upside becomes incremental rather than exponential.

Private software investing allows participation at a stage where or before products are built, revenue exists, growth is accelerating, and valuations remain reasonable. Although you more than likely have to be an accredited investor to enter into these deals, the upside can be much larger in comparison than traditional commercial real estate investing, the stock market, or just about any investment vehicle you can think about.

This is why sophisticated investors increasingly allocate capital toward private software and AI platforms, rather than waiting for public listings.

Jason Criddle and SmartrHoldings: A Long-Term Track Record

SmartrHoldings was not built overnight, nor was it created to chase trends. For more than a decade, our work has focused on building, scaling, and operating real businesses across software, payments, marketing technology, media, and infrastructure.

Over the years, we have helped investors understand:

• How private software companies scale.
• How recurring revenue models outperform asset-heavy businesses.
• How diversification across platforms reduces risk.
• How early positioning creates outsized returns.

This long-term perspective shapes how we approach both commercial real estate investing as well as technology investments.

We do not view them as competing categories.
We view them as layers of the same economic system when combined in situations such as datacenters.

Why SmartrHoldings Focuses on Infrastructure, Not Speculation

At SmartrHoldings, we prioritize investments that behave like infrastructure.

Infrastructure investments share common characteristics, such as long-term relevance, essential utility to businesses large and small, recurring usage and revenue opportunities, embedded switching costs, and predictable demand if you are good at following market trends.

• Data centers qualify.
• Payment platforms qualify.
• Enterprise software qualifies.
• AI infrastructure qualifies.

Speculative investments, by contrast, rely on hype, timing, or market sentiment. We avoid those, and have a portfolio of brands people NEED to use in order to participate in the world of commerce.

DOMINAIT.ai and the Evolution of AI Infrastructure

DOMINAIT.ai represents a next-generation AI infrastructure platform designed to operate across multiple businesses, tools, and industries.

Rather than functioning as a single consumer AI product, DOMINAIT.ai is built as an intelligence layer that integrates with software platforms, workflows, and enterprise systems.

Its powerful architecture emphasizes distributed intelligence, reasoning-based automation, business process orchestration, and especially scalability without centralized bottlenecks that you see in the news today.

This approach aligns more closely with infrastructure investing than with speculative AI product launches.

Just as data centers support the digital economy, AI infrastructure platforms like DOMINAIT.ai support the operational economy of businesses.

Risk Management Through Diversification

One of the most important advantages of private software investing through a platform like SmartrHoldings is diversification.

Compared to commercial real estate investing, or real estate in general, rather than relying on a single property, or a single tenant, or even a single geographic market… investors gain exposure to multiple companies in multiple industries with multiple revenue streams from multiple customer bases.

As customer adoption grows across our platforms, risk becomes increasingly distributed. Growth in one area strengthens the entire ecosystem. Not to mention, growth in one company usually means growth in the processes and infrastructure that supports it. So we try our best to own those companies too.

Comparing Long-Term Outcomes

When comparing private software and AI investing to commercial real estate investments, the differences become clear.

Commercial real estate excels at:

• Capital preservation
• Income stability
• Tangible asset backing

Private software and AI excel at:

• Growth acceleration
• Scalability
• Network effects
• Margin expansion
• Pre-IPO value creation

And datacenters sit between these two worlds, offering a bridge between physical infrastructure and digital demand.

At SmartrHoldings, our strategy reflects this reality by participating in all three layers, while emphasizing where the greatest long-term upside resides. 

A Forward-Looking Investment Perspective

The global economy is becoming increasingly software-defined. Business operations, payments, marketing, logistics, media, and decision-making are all shifting into digital platforms powered by AI and companies that thrive throughout the Smartr umbrella.

• Capital flows follow utility.
• Utility follows adoption.
• Adoption follows efficiency.

Private software and AI infrastructure sit at the center of this evolution.

A Final Thought For You…

Commercial real estate will always have a role in investment portfolios. Data centers, in particular, remain among the strongest real estate assets available today.

However, the highest-return opportunities of the next decade are increasingly found inside the software and AI systems that power modern business, not in the buildings that house them.

Private software, AI infrastructure, and pre-IPO platforms offer scalability, diversification, and growth characteristics that traditional real estate cannot match. At all.

At SmartrHoldings, our approach reflects more than a decade of experience helping investors navigate these shifts. By combining infrastructure thinking with technology execution, we aim to position capital where it can compound most effectively over time.

This resource is intended to help investors make informed decisions, understand evolving markets, and evaluate how private software and AI fit alongside traditional assets in a modern portfolio.