Is Now a Buy-Low Opportunity for Private Real Estate?

Executive summary:

  • Potential benefits of investing in private real estate include diversification, competitive returns, relatively low volatility and income-generating capabilities.
  • We believe that private real estate is currently near the bottom of a market cycle, presenting a potentially compelling buying opportunity for some investors today.
  • Specifically, we think that the positive growth trends in some sectors of private real estate—including industrials, apartments and specialty sectors such as data storage and healthcare—when combined with the right active management approach, could allow for potential outperformance.

When it comes to the private real estate sector, the mention of the U.S. commercial office sector scares many investors away. While the office sector may give some investors pause, it's also prudent to look at the bigger picture, especially when that picture may conclude that private real estate is near the end of a market cycle and may hold significant investment opportunities.

No matter where we may be in a market cycle, we believe private real estate has a role to play. Let's examine the potential benefits it can bring to a portfolio.