Good Real Estate Assets With Bad Capital Structures
Nov 1, 2023
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Margaret McKnight, Head of Real Estate Portfolio Solutions at StepStone Group discusses real estate recapitalizations. They explore the impact of higher interest rates on real estate investments, winners in the real estate market, and opportunities for distressed recapitalization in the commercial real estate market.
Industrial facilities can reduce water consumption by up to 44%, energy use by up to 22%, and greenhouse gas emissions by up to 12% by optimizing water use.
Opportunities for real estate investors exist due to the shortage of capital caused by slow adjustment of appraisals and capital deployment processes.
Deep dives
The environmental impact of global water use
Global water use, storage, and distribution contribute 10% of global greenhouse gas emissions, according to CDP. By optimizing water use, industrial facilities could reduce water consumption by up to 44%, energy use by up to 22%, and corporate greenhouse gas emissions by up to 12%.
Investment opportunities in the private market
Stepstone Group focuses on private market investments, including real estate, private equity, private debt, and infrastructure. While new commitments have tapered off, there is still significant interest in deploying capital. The slow adjustment of appraisals and capital deployment processes create a shortage of capital on both the debt and equity side, leading to opportunities for investors.
The evolving landscape of real estate
The real estate market is experiencing a shift in demand and opportunities. Office spaces are facing challenges due to technological changes, remote work, and tenant pullback. However, other sectors such as e-commerce, industrial, and residential are benefiting from changing consumer trends and higher interest rates. Investors should focus on property types with potential buying opportunities and resilient fundamentals.
Margaret McKnight, Head of Real Estate Portfolio Solutions at StepStone Group, discusses opportunities for investors specializing in real estate recapitalizations. Hosts: Carol Massar and Jess Menton. Producer: Paul Brennan.