Private Real Estate
The strategy will seek to capitalize on the deal sourcing and execution capabilities of the firm’s established private and listed real estate investment teams to seek attractive risk-adjusted returns.
WHY COHEN & STEERS
Vast experience with more than 35 years of alpha generation in listed U.S. real estate and 18 years in global real estate
A dedicated private real estate group with senior team members who have worked together for 12 years
Access to differentiated information such as proprietary private and pre-IPO deal flow
WHY PRIVATE REAL ESTATE
Significant secular shifts in real estate usage patterns
Changing housing needs, technological innovation and cost-of-living differences are driving the greatest shift in real estate utilization since the 1950s
Superior return vintages tend to follow cyclical bottoms
The best returns in real estate have historically been in vintages that follow economic recessions and corrections
Return of inflation
Real estate has historically delivered strong returns during inflationary periods, with cash flow growth typically keeping pace with or exceeding inflation
The Cohen & Steers Private Real Estate Group (PRE Group) was established as a strategic extension of the firm’s expertise in listed real estate, allowing us to enhance its range of real estate strategies as well as its ability to provide clients with bespoke investment solutions by accessing the $15 trillion private real estate market in the United States.
The PRE Group capitalizes on the deal sourcing and execution capabilities of the firm’s established private and listed real estate investment teams to seek attractive risk-adjusted returns.
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 one of the first investment advisors 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.
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PORTFOLIO MANAGEMENT
An experienced team
+1 analysts and associates
Cohen & Steers’s philosophy is to seek superior risk-adjusted returns by farming both efficient markets, which rely heavily on niche strategies, and inefficient markets, which others view as too complex or burdensome. The investment strategy is based on three related tenets:
Exploitation of inefficiencies
Capitalizing on informational advantages to identify micromarket imbalances and secure investments on favorable terms.
Value-added executions
Creating capital appreciation opportunities through repositioning, restructuring, development and intensive management.
Cautious contrarianism
During economic downturns or secular changes, investing in out-of-favor sectors or markets to exploit capital or product misalignments.
The PRE Group has deep experience in sourcing, underwriting and executing investment opportunities, leveraging a robust network of best-in-class regional and sector-specific operating partners. The group seeks to invest in thematic opportunities that may appear mispriced and thus may provide a desirable risk–reward ratio.
We expect to gain access to proprietary deal flow resulting from our industry-leading global real estate platform and deep relationships. This includes access to entity-level pre-IPO and PIPE deals in addition to direct private equity real estate transactions. Entity-level deal flow is viewed as a differentiator versus other private equity managers.
APPROACH
Our investment process
The PRE Group invests using a value-oriented approach that seeks to identify opportunities with high-quality fundamentals and potential for attractive long-term growth.
Uncover themes
We identify relevant demographic and economic trends and determine key real estate sectors and geographies that may be poised to benefit.
Determine value
We combine top-down and bottom-up research of sectors and idiosyncratic opportunities to establish expected valuation metrics for various sectors and geographies. We also determine investment sectors that appear mispriced or have the most desirable risk/reward paradigm.
Select and structure opportunity
We structure acquisitions to effectively access target real estate including asset-level and programmatic joint ventures, recapitalizations and portfolio or entity transactions. We capitalize acquisitions with appropriate and attractive debt financing.
The Real Estate Reel: The listed REIT selloff, valuations, and the private CRE correction
We see a regime change in what’s driving the recent listed REIT selloff. REIT valuations appear cheap. And the pattern in the decline in private real estate is reminiscent to what occurred in the wake of the 1990s S&L crisis, indicating the selloff and recovery could be a slow grind. Watch this month’s Real Estate Reel to find out what these data points mean for real estate investing.
Real Estate Reel: We’re watching institutional allocations, CRE debt and property price disconnects
Institutional investors have increased their allocations to real estate, CRE debt delinquency rates are increasing but remain relatively low, and CRE valuations are down more than 16% so far this year. Watch this month’s Real Estate Reel to find out what these data points mean for real estate investing.
The Real Estate Reel: Three data points actually driving real estate investing today
Welcome to The Real Estate Reel from Cohen & Steers where we provide three insights on real estate investing in three minutes each month.
Recent CRE transactions signal listed REIT strength
Listed REITs are now in a position to provide liquidity to the broader commercial real estate market.
As private real estate sells off, our conviction in REITs grows
Recent market events, including a downturn in private real estate, give us greater conviction in our analysis showing favorable entry points emerging for global listed REITs.
Private real estate entry points emerging amid selloff
A 12-year investment cycle fueled by historically low rates is coming to an end as private real estate reprices
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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.
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. Active management is not guaranteed to outperform the broader market index.
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.
The strategy invests in private real estate investments which are illiquid and susceptible to economic slowdowns or recessions and industry cycles, which could lead to financial losses in a portfolio and a decrease in revenues, net income and assets. Lack of liquidity in the private real estate market makes valuing underlying assets difficult. Appraisal values may vary substantially from a price at which an investment in real estate may actually be sold.
The strategy may use leverage, directly or indirectly in connection with an investment. The use of leverage involves a high degree of financial risk and may increase the exposure of investments in the strategy to factors such as rising interest rates, downturns in the economy, or deterioration in the condition of the properties underlying such investments. Leverage magnifies favorable and unfavorable effects of price movements in a portfolio’s underlying assets and overall aggregate returns of a portfolio.
A portfolio in the strategy could potentially be concentrated in relatively few underlying assets and thus the benefits of diversification may not be fully realized. Because of the length of time typically needed to construct a private real estate portfolio, initially the strategy will not be diversified. A limited number of underlying assets could result in aggregate returns realized by the investor which are substantially adversely affected by the unfavorable performance of a small number of underlying assets.