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Insights

Following the Flows

Where Capital Is Headed in 2024

Understanding market dynamics is crucial for investors aiming to maximize returns.

Our latest piece from Global Head of Investor Insights, Abby Corbett, unpacks 2024 transaction types, predicted buyers and sellers, and how the direction of capital flows will impact future investment decisions.   

Explore the questions below or dive deeper into the full report to get a better understanding on how to capitalize on opportunities that may arise during a transitioning real estate market.  

What Types of Activity Are Likely to Drive the Market Throughout 2024? 

Types of activity will take the form of: 

  • Direct asset purchases/sales: In the near-term, this period of illiquidity is affording private capital the opportunity to step into a significantly less competitive market today to directly acquire assets.  
  • Recapitalizations: This period is also offering a significant opportunity for equity to come in and recapitalize assets where existing ownership doesn’t want to part with the asset entirely.  
  • Lender-facilitated note sales: Private equity capital can also come in and purchase the distressed loans/note sales. 
  • Diversification of debt sources: Finally, private debt funds can also step into an illiquid market today and effectively take advantage of the distress throughout the marketplace as opposed to distress of a given asset. 

DIVE DEEPER ON ACTIVITY TYPES IN THE FULL REPORT >>

Where Do You Think We Will See Active Capital Flows on the Sell Side? Who Will Be Sellers?   

  • Owners facing necessity-based conditions who are finally coming to terms with the higher-cost of capital environment.  
  • Sellers facing debt maturities—particularly those that bought at the peak with shorter-term, bridge-loan financing. 
  • ODCE funds and non-traded REITs facing elevated redemption and withdrawal requests.  
  • Even private funds that aren’t experiencing elevated redemptions; they might still decide to meet the market if they are experiencing declining portfolio cash flows and property valuations.   
  • Closed-end funds and separate accounts with assets that have achieved business plans, looking to liquidate and get their promotes. 

DIVE DEEPER ON THE SELL SIDE IN THE FULL REPORT >>

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Where Do You Think We Will See Active Capital Flows on the Buy Side? Who Will Be Buyers? 

  • Private capital (unlevered) buyers who are seeking to capitalize on this “window” of dislocation. 
  • Investors that are still interested in balancing (and rebalancing) their portfolios into higher-growth or different sectors or markets to ensure diversification.  
  • Investors that recognize downturns, periods of illiquidity and dislocation create attractive vintage years for investment. 
  • Opportunistic and value-add investors who have enough conviction and do not want to wait until there is a clear inflection. 
  • REITs that will continue to exercise their advantageous access (unsecured capital) to grow their portfolios and businesses strategically. 
  • Entity-level merger and acquisition activity.  
  • Private capital buyers active in smaller deals.  
  • Holders of note sales, not just asset sales, because they are likely to drive improvements in price discovery and aid the distress process overall. 

DIVE DEEPER ON THE BUY SIDE IN THE FULL REPORT >>

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