Streaming Income - A Podcast from Barings

The Multi-Decade Opportunity in U.S. Residential Real Estate

Jul 31, 2024

Maureen Joyce, Head of U.S. Equity Real Estate at Barings, brings 35 years of expertise to the table. She dives into the U.S. housing crisis, pinpointing key factors like supply shortages and rising rental demand. Joyce discusses the shift towards build-to-rent solutions as a viable investment opportunity. She also highlights promising U.S. markets for real estate investment and the importance of adapting strategies to meet shifting demographics. Insights on how the upcoming U.S. election might influence this landscape add a fresh angle to the conversation.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

Housing Shortage Drives Crisis

The U.S. is currently short about 7.2 million housing units, creating a supply-demand imbalance.
This shortage combined with rising interest rates has driven a severe housing affordability crisis.

INSIGHT

First-Time Buyers Most Impacted

First-time homebuyers, especially Gen Z and millennials, face the toughest challenges due to high prices and high mortgage rates.
Existing debts like student loans also burden middle income earners trying to save for down payments.

INSIGHT

Homeownership Decline Fuels Renters

Decline in homeownership has led to millions of potential renters entering the market.
For every 100 basis points drop in homeownership rate, about 1.3 million additional renters emerge.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

The U.S is experiencing a housing crisis driven by a lack of new supply and challenged affordability. But for investors providing the capital to modernize the country’s stock of housing, attractive returns may lie ahead. Maureen Joyce explains.

Episode Segments:

(04:41) – The key factors driving the U.S. housing crisis

(09:02) – The demographic groups most impacted

(12:50) – Where re-pricing and long-term structural trends converge

(15:02) – Build-to-rent as both a housing solution and attractive investment opportunity

(19:57) – The U.S. cities and regions where the Barings team is seeing value today

(30:14) – Where the team prefers to take risk - from development to core

(34:35) – The relative attractiveness of RE debt vs. equity

(38:34) – How the outcome of the U.S. election may impact the residential investment opportunity

(39:52) – Final thoughts

IMPORTANT INFORMATION

Any forecasts in this podcast are based upon Barings’ opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Any examples set forth in this podcast are provided for illustrative purposes only and are not indicative of any future investment results or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this podcast. No representation is made that an investment will be profitable or will not incur losses.

Barings is the brand name for the worldwide asset management and associated businesses of Barings LLC and its global affiliates. Barings Securities LLC, Barings (U.K.) Limited, Barings Global Advisers Limited, Barings Australia Pty Ltd, Barings Japan Limited, Barings Real Estate Advisers Europe Finance LLP, BREAE AIFM LLP, Baring Asset Management Limited, Baring International Investment Limited, Baring Fund Managers Limited, Baring International Fund Managers (Ireland) Limited, Baring Asset Management (Asia) Limited, Baring SICE (Taiwan) Limited, Baring Asset Management Switzerland Sarl, and Baring Asset Management Korea Limited each are affiliated financial service companies owned by Barings LLC (each, individually, an “Affiliate”).

NO OFFER: The podcast is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service in any jurisdiction. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This podcast is not, and must not be treated as, investment advice, an investment recommendation, investment research, or a recommendation about the suitability or appropriateness of any security, commodity, investment, or particular investment strategy.

Unless otherwise mentioned, the views contained in this podcast are those of Barings and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. Parts of this podcast may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this podcast is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information

Any service, security, investment or product outlined in this podcast may not be suitable for a prospective investor or available in their jurisdiction.

Copyright in this podcast is owned by Barings. Information in this podcast may be used for your own personal use, but may not be altered, reproduced or distributed without Barings’ consent.

24-3734582