Do you know what alternative assets are?
This is an umbrella term for a diverse set of product subtypes that serve different populations and have different operational attributes.
Prices, liquidity and investor profiles are distinct from conventional asset classes such as the office, industrial, retail and multifamily sectors. Some examples are the data centers, healthcare, life sciences and self-storage sectors.
Despite a general economic slowdown affecting a wide range of sectors, alternative assets maintain strong performance indicators, including occupancy levels.
Compared to traditional CRE asset classes, alternative sectors have shown resilience during the last three crises and stand out as attractive areas in the evolving commercial real estate landscape.
Cushman & Wakefield evaluated demand drivers and investment performance of these unique asset classes.
Check out the main conclusions of the study:
Resilience
While overall transaction activity declined last year, along with the rest of CRE, a number of these subsectors showed resilience and remained strong in rent and occupancy.
Potential
Several of these asset types continue to be operated by non-institutional organizations. Institutional participation in alternative asset sectors varies, and there is room for further expansion. This expansion has the potential to reinforce prices and liquidity, creating a mutually beneficial relationship.
Specificities
Investors must be aware of the operational, regulatory and industry-specific nuances of managing these types of properties - often market entry will involve selecting the right acquisition target or experienced partner to execute a viable strategy.
Historic
During the last three crisis-plagued economic years, alternative assets have consistently outperformed the recovery of major asset types. This data continues to reinforce the idea that alternative assets could offer a safe haven for capital in the event of a future economic downturn.
