Private Equity Real Estate (PERE) pools private capital into fund vehicles to invest in income producing real estate assets
Investments are made as either equity or debt across various strategy profiles and asset classes
Types of Real Estate Strategies
Core - acquiring high-quality, stabilized properties. Lowest risk profile.
Core-Plus - moderate-quality properties, operating similar to core, but with room for improvements.
Value-Add - investing in properties that require capital expenditures to create value and reach optimization.
Opportunistic - Adaptive reuse, ground-up development, or other strategy involving significant improvement to reach optimization. Highest risk & return potential.
Types of Real Estate Asset Classes
Why Invest in Real Estate?
Investing in real estate allows LPs to select a risk/return profile that aligns with their needs. They are able to diversify their allocation by investing in a fund that acquires a range of asset classes and/or strategy profiles. Typically, it offers a low risk, stable cash yielding solution. Most funds will yield predictable cash distributions to investors on a quarterly basis. Additionally, real estate investments help mitigate inflation risk, as tenant leasing prices are linked to CPI and inflation.
Types of Institutional Investors
Public Pension Funds
Sovereign Wealth Funds
Other Institutions Include: Private Pensions, Foundations, Banks, Family offices
Leading Real Estate LPs
State of Real Estate Fundraising
Articles of Interest