While traditional banks’ appetite for providing commercial real estate loans has declined, other lenders (including investment management firms such as LaSalle) have moved in to fill the funding gap. As a result, we have recently seen increasing interest from institutional investors in real estate debt.
But what is it about real estate debt that makes it a compelling investment? As the second largest of the “four quadrants” of real estate, it has a value in the US and Europe alone of approximately US $4.5 trillion, representing an enormous opportunity. Real estate debt historically has produced competitive risk-adjusted returns in addition to showing low correlation to other assets.
In our latest research, we examine the three-part case for investment, including:
Real estate debt’s place in institutional portfolios,
The role of non-bank lending, and
The debt opportunity today, which takes advantage of a looming debt funding gap and attractive pricing.
Contributors:
Brian Klinksiek
Global Head of Research and Strategy
Dominic Silman , PhD
Europe Head of Debt and Value-add Capital Research and Strategy
Jen Wichmann
Senior Strategist, Research and Strategy
Hina Yamada
Senior Research Analyst, European Research and Strategy
