Core Real Estate Now:
A Strategic Entry Point
CIM believes core real estate is poised to provide investors with a compelling opportunity. For those who ask, “Why now?” multiple factors make a convincing case. After a period of economic uncertainty and market volatility, conditions appear to be stabilizing. Inflation has been on a steady downward path,1 and the Federal Reserve has started on a path of interest rate cuts, with a 50 bps decrease in September 2024.2
?
Against this backdrop, real estate fundamentals are strong across all sectors (except office), with very limited new construction starts as of Q3 2024. Not only has core real estate delivered resilient performance over the long term, but it has rebounded from downturns with sustained periods of robust returns. We believe investors looking to allocate capital for higher returns in the future may find a favorable entry point in core real estate.
Key Takeaways:
- Stabilizing inflation and encouraging economic conditions3 may favor a rebound for core real estate.?
?
- Strong fundamentals across real estate sectors and limited new construction starts are helping to set the stage for future growth.?
?
- Core real estate has provided resilient long-term out performance over the past 25 years as well as attractive risk-adjusted returns following economic downturns.4?
?
- While past performance doesn’t guarantee future success, an ideal strategy would be repeatable over time and illustrate an ability to create value within assets across market cycles.
Core Real Estate Now:
A Strategic Entry Point
- The Federal Reserve: Review and Outlook, Speech by Chair Jerome Powell, 23 August, 2024 (https://www.federalreserve.gov/newsevents/speech/powell20240823a.htm)
- The Federal Reserve: Federal Reserve issues FOMC statement, Press Release, 18 September, 2024.
- The Federal Reserve: Review and Outlook, Speech by Chair Jerome Powell, 23 August, 2024 (https://www.federalreserve.gov/newsevents/speech/powell20240823a.htm)
- NCREIF ODCE, Q4 2023.
?
CIM4566785