The hunt for relative value amid evolving risk and reward profiles is never-ending, but in recent years the task has been complicated by uncertain interest rates, the residual results of the COVID-19 pandemic, the looming threat of recession, and excruciating gyrations in government and geopolitics. Some property sectors have seen routs lately, such as certain central business districts, a warning to any investor who wants to go all in on a major transaction. Big deals mean big exposure and sometimes shrinking exits. “There are competitive secrets that every institutional investor enjoys, which give them the opportunity to improve properties post-closing, whether it is in the pricing of rents, reaching credit tenants or maximizing operating efficiency,” explains Brian Lerman, partner, Real Estate, at Goodwin. “Some smaller deals offer the opportunity to achieve increased alpha if prior owners failed to capitalize on these opportunities.”
Read the Institutional Real Estate, Inc. article for more.