Read more: Is it time to catch the real estate wave?
“Differences in the real-time pricing of listed REITs and private real estate can create significant short-term dislocations. By understanding the leading and lagging behaviors of private and listed markets, real estate investors may be able to tactically allocate at different times across the two asset classes, seeking to take advantage of how markets have priced in current conditions.”
Investors may see bright spots in private real estate for several years.
Against the backdrop of an average recession, the report’s authors predicted that private real estate values could decrease by as much as 15%. While they viewed a severe recession as unlikely, they said it could potentially drive prices down by up to 25%.
After a few quarters of negative GDP growth, Cohen & Steers believes that the market is already in a “shallow recession.”
