Ready For It?: KKR on capital’s reviving interest in real estate
Mar 25, 2024
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KKR's Roger Morales and CBRE's Kevin Aussef discuss the revival of interest in real estate investments. They explore evolving market sentiments, capital dynamics, top growth markets, and investment strategies inspired by Warren Buffett's principles in uncertain markets.
Capital is showing renewed interest in real estate assets and markets.
Investors are prioritizing high-quality assets at discounted prices for stable cash flow.
Deep dives
Capital Markets Uncertainty in Commercial Real Estate
The commercial real estate sector is navigating macroeconomic uncertainties, including interest rate fluctuations and economic trends. While there is more certainty compared to the past year, investors remain cautious and seek ways to express new investment opportunities and manage their portfolios amidst evolving market conditions.
Optimism Among Investment Sales Teams
Investment sales professionals, particularly in the multifamily sector, are witnessing a surge in activity with a notable presence of dry powder on the sidelines. This optimism is driven by increased investor conviction and a favorable market outlook, especially in primary markets, fostering positive sentiment across various asset classes.
Trends in Deal Structure and Market Dynamics
The market is experiencing a shift towards larger deal sizes and expanding bidder pools, indicative of a changing landscape in commercial real estate transactions. While bid-ask gaps persist, there is a notable increase in transaction volume and interest, supported by abundant debt capital availability and improving CMBS market dynamics.
Investors are strategically focusing on acquiring high-quality assets at discounted prices, emphasizing cash flow stability and reduced execution risk. The evolving market conditions, characterized by deleveraging cycles and fluctuating interest rates, prompt a meticulous evaluation of underwriting strategies to align with long-term investment goals and market dynamics.
Real estate investment markets are stirring after an extended pause, and capital may be ready to come off the sidelines. KKR’s Roger Morales and CBRE’s Kevin Aussef share insights on what assets, strategies and markets stand to benefit from an expected pick up in commercial real estate activity later this year.Real estate investment markets are stirring after an extended pause, and capital may be ready to come off the sidelines. KKR’s Roger Morales and CBRE’s Kevin Aussef share insights on what assets, strategies and markets stand to benefit from an expected pick up in commercial real estate activity later this year.
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