Next Generation Real Estate
This strategy seeks to deliver capital appreciation and income by investing in real estate sectors we believe will thrive amid the growth in e-commerce and demand for property to support the digital economy as well as sectors that can capitalize on the changing residential needs of key demographic cohorts, such as baby boomers and millennials.
WHY COHEN & STEERS
One of the largest, most experienced REIT specialist teams delivers extensive analysis
Direct access to management teams and industry participants is leveraged into value-added investment decisions
One of the first asset managers dedicated to REITs
WHY REITS
Dramatic sector growth
Next-generation sectors have grown on the back of secular growth drivers, such as increased data usage, and now represent over half of the total market cap of the U.S. REIT market
Attractive income and growth potential
REITs tend to pay attractive dividends, offering an alternative source of income
More attractive historical returns
Next-generation real estate sectors, in aggregate, have historically delivered more attractive returns with lower volatility than traditional core real estate sectors over the long term
Cohen & Steers Next-Generation Real Estate Securities invests in real estate sectors we think are poised to thrive amid the growth in e-commerce and demand for property to support the digital economy as well as sectors that can capitalize on the changing residential needs of key demographic cohorts such as baby boomers and millennials. This strategy offers an effective way to capitalize on the growing securitization of real estate and the historically beneficial investment characteristics of large-scale income-producing properties. With it, we seek to maximize total return with a balance of capital appreciation and income.
Non-core real estate sectors make up more than 50% of the total market capitalization of the U.S. REIT market. These sectors have grown dramatically on the back of supportive secular growth drivers such as increased data usage and the transformation of the logistics value chain. Non-core real estate sectors in aggregate have historically delivered more attractive returns with lower volatility than traditional core real estate sectors over the long term.
With 22 professionals on the global real estate investment team, Cohen & Steers employs one of the largest and most experienced groups dedicated to global real estate securities, providing competitive market coverage and access to information on listed property investments. We have portfolio managers, research analysts and traders located in key markets, including New York, London and Hong Kong. Our 8 portfolio managers have an average of 22 years of investment experience and have been with the firm for an average of 13 years.
FEATURED INSIGHT
Strong foundations: The case for real estate securities
Listed real estate offers access to high-quality assets with strong growth potential, providing an efficient, liquid vehicle for investors seeking the unique benefits of the asset class.
August 2022 | 37 mins
WHY INVEST WITH US
Delivering value to our clients
Cohen & Steers has been at the forefront of real estate investing for more than 35 years. As the first investment advisor to focus on real estate securities, with a long-standing commitment to the asset class, our top priority is to deliver strong investment performance through our industry-leading real estate securities platform. Our dedication and drive for excellence have allowed us to build a foundation designed to provide sustainable outperformance relative to our peers.
PORTFOLIO MANAGEMENT
An experienced team
+6 analysts and associates
We believe that publicly traded real estate securities are an attractive way to allocate to real estate. The philosophy that guides our real estate strategies is based on the following principles:
Market inefficiencies may create opportunities
Equity markets tend to be inherently inefficient at pricing real estate fundamentals. Active managers can capitalize on inefficiencies through stock selection by identifying material dislocations between share prices and fundamentals.
Research can deliver a sustainable advantage
As listed real estate specialists, we are highly attuned to changes in property fundamentals, often allowing us to trade on information earlier and faster than generalist managers.
Attracting and developing a deep bench of talent is critical to long-term success
A team approach that emphasizes stability, collaboration and continuous improvement fosters a culture of investment excellence, providing the experience and perspective to successfully navigate real estate and stock market cycles.
Local decision-making within a global process
The drivers of real estate fundamentals are inherently local, so there is a benefit to locating analysts on the ground in the regions they cover.
Integrated risk management is paramount
Delivery of superior risk-adjusted returns demands an embedded, comprehensive and multidimensional approach to risk management.
Environmental, social and governance (ESG) analysis is explicitly integrated into our securities analysis and portfolio construction process
We think the deep understanding of ESG risks and policies are critical to unlocking value and mitigating risk.
APPROACH
Our investment process
Our strategy employs a relative-value investment process to identify securities that we believe are mispriced relative to underlying assets (e.g., net asset value, or NAV) and going concerns (e.g., dividend discount model, or DDM) and is designed to generate meaningful and consistent alpha.
Macro research
Our macro research process is based on the following critical factors: the economy, real estate fundamentals, capital markets and the regulatory and political environment.
Model overlay
Portfolio managers generate a standard overlay of economic assumptions that creates a framework around which our analysts can build models to estimate key financial metrics.
Fundamental research
The analysts use fundamental qualitative and quantitative research to generate forward-looking NAVs and DDM estimates for the securities under coverage. The team integrates ESG factors into the research and valuations as an integral aspect of the investment process.
Portfolio construction
Our proprietary valuation model guides portfolio construction. Judgments with respect to risk management, liquidity and other factors overlay the model’s output and drive investment decisions.
Unlocking value: What end of rate hikes may mean for preferreds
With inflation peaking and recession looming, we anticipate a strong vintage year for fixed income—with declining rates potentially leading to outsized returns and high tax-advantaged income from preferred securities.
ESG: opportunities and challenges within real estate
Environmental, social and governance issues present demonstrable risks and opportunities for real estate. Khalid Husain, Head of ESG, and Jan Willem van Kranenburg, Senior Analyst, discuss how our integrated ESG approach at Cohen & Steers assesses and values these topics as part of our investment approach among different real estate sectors and companies.
Closed-end fund commentary 3Q 2022
October 2022 | 3 minsClosed-end funds finished the quarter down following persistent inflation and continued talk of monetary policy tightening.
Institutional Investor: The Best Real Estate Returns Come After Recessions
October 2022 | 1 minHead of Private Real Estate James Corl spoke with Institutional Investor for a feature story on our recent whitepaper and why an optimized real estate portfolio may require access to both listed and private markets.
With Intelligence: Cohen & Steers’ new private RE group eyes discounted retail, office
Head of Private Real Estate James Corl spoke to With Intelligence about the Private Real Estate Group’s current market outlook and the opportunities that the team is looking at, including retail, surban office and housing.
Recession and the roadmap for listed and private real estate
We see an economic backdrop that will create an opportunity for strong vintage returns for both listed and private real estate. Both cyclical and secular shifts are likely to create investment opportunities, and we think allocating across both private and listed real estate will be critical.
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We’d be happy to answer questions about our investment solutions or any corporate-related inquiries.
We consider the information in this communication to be accurate, but we do not represent that it is complete or should be relied upon as the sole source of suitability for investment. Investors should consult their own investment professional with respect to their individual circumstances.
The statements above reflect the typical investment process. At any given time, other criteria may affect the strategy. Past performance does not predict future returns. Risks involved with investment, including potential loss of capital, are substantial and should be carefully considered. The views and opinions are as of the date of publication and are subject to change without notice. There is no guarantee that any historical trend illustrated above will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that a market forecast made above will be realized.
Important Risk Considerations: Investing involves risk, including entire loss of capital invested. There can be no assurance that the investment strategy will meet its investment objectives. Diversification is not guaranteed to ensure a profit or protect against loss. Risks of investing in real estate securities are similar to those associated with direct investments in real estate, including falling property values due to increasing vacancies or declining rents resulting from economic, legal, political or technological developments, lack of liquidity, limited diversification and sensitivity to certain economic factors such as interest rate changes and market recessions. Foreign securities involve special risks, including currency fluctuations, lower liquidity, political and economic uncertainties, and differences in accounting standards. Some international securities may represent small- and medium-sized companies, which may be more susceptible to price volatility and less liquidity than larger companies.