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Private real estate financing appears to be declining. This is an unexpected development for a strategy usually considered an inflation hedge. An increase in real estate allocations was expected earlier this year, but that increase has not materialized throughout the first half of the year.
According to the latest Global Real Estate Report, sponsored by Baker Tilly, changing investor interest, combined with evolving competing market forces, is changing the landscape.
In the gist:
- Real estate represented the smallest share of total private market capital raised in the first half of the year than in any previous year. This is partly due to the attractiveness of real assets amid the recent strong performance of infrastructure.
- The one-year IRR of real estate will reach 24.8% by 2021. This is his best performance of the decade and just shy of the all-time high reached in 2011.
- With bid-ask spreads between buyers and sellers widening as the prospect of a recession and market correction looms, some investors are waiting for the economic cycle to reset before investing more aggressively in real estate. may be distributing
- Opportunistic funds accounted for the majority of the funds raised, over 50% of the total, while distressed funds dropped to just 1%. This may seem surprising given the current market, but our data shows that the correlation between funding difficulties and recession is less than expected. .
table of contents
| important point | Four |
| Definition of types of real estate funds | Five |
| Overview | 6 |
| A word from Baker Tilly | 12 |
| core and core plus | 14 |
| Added value | 16 |
| Anguish and Opportunism | 18 |
| debt | 20 |
| public and private performance | twenty two |