Is real estate’s allocation slide a brief dip or a sign of a larger rebalancing?
A multi-year slowdown in private real estate has prompted institutional investors to cut their average target allocation to the asset class for the first time in more than a decade. Is it merely a short-term setback for property fund managers, or a sign of a broader shift within institutional portfolios?
The historic reversal reported by Hodes Weill & Associates this week comes after the capital advisory firm had found a steady increase in average target allocations since 2013, when it began tracking them with an annual survey in partnership with Cornell University’s Baker Program in Real Estate. But those gains plateaued starting in 2022, and this year’s 10-basis-point dip suggests that the market effects of high interest rates, geopolitical concerns and the rise of other attractive alternative asset classes are far from over.
In this episode, PERE senior reporter Harrison Connery joins host Greg Dool to break down this year’s Allocations Monitor survey results, and contextualize the main takeaways. Hodes Weill co-founder Douglas Weill also shares his perspective on the results and what they might mean for private real estate fundraising moving forward.
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Real estate credit finds its footing as markets recalibrate
This episode is sponsored by Bravo Capital
The lending landscape is shifting, and private credit is taking center stage. In this episode, Bravo Capital founder and CEO Aaron Krawitz discusses how his firm is navigating a market defined by bank pullbacks, rising regulation and persistent demand for rental housing.
Krawitz outlines where opportunities are emerging: ground-up multifamily construction, healthcare and skilled nursing facilities, and HUD-backed permanent financing. As traditional lenders retrench, these areas are seeing renewed activity from private lenders that can move quickly and tailor structures to complex projects.
He also reflects on how Bravo has adapted since launching at the height of the pandemic, emphasizing the importance of a disciplined approach and alignment with investors through shifting market conditions. That ethos, he says, has supported a focus on quality borrowers, measured construction exposure and long-term partnerships over loan volume metrics.
Across development financing, bridge loans and HUD takeouts, Bravo sees a broader trend in real estate credit: private lenders are leading the way with financings, even amid market uncertainty.
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'Fox in the henhouse': Blackstone’s UK REIT push takes a surprising turn
Blackstone emerged last month as the winner of a year-long takeover battle for UK industrial landlord Warehouse REIT after knocking out rival suitor Tritax Big Box with a £489 million ($656 million; €562 million) bid. But as it turns out, that was not the end of the Blackstone-Tritax saga.
In a surprise twist this week, the rivals became partners when Blackstone announced an agreement to sell a £1 billion UK logistics portfolio to Tritax, just weeks after Tritax bowed out of its pursuit of Warehouse REIT. For an added level of intrigue, the deal reportedly involves both cash and Tritax stock, meaning Blackstone will hold an 8.6 percent stake in Tritax Big Box after the deal.
What should the industry make of this sequence of events, and what does it suggest about US private real estate managers’ ongoing push into the UK-listed property market?
This episode breaks it all down. Listen as host Greg Dool gets the latest from PERE Deals reporter Sarah Marx, who has covered the saga’s every turn, and PEI real estate editor-in-chief Jonathan Brasse, who offers his perspective on the affair and how it compares to a similar dalliance between Brookfield Asset Management and UK REIT Segro last year.
Later in the episode, Marx sits down with Matthew Norris, head of real estate securities at London-based manager and REIT investor Gravis Capital, for his take on the story and the growing number of takeover battles between private equity and publicly listed REITs.
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Defense spending and real estate: Insights from Expo Real
PERE and its affiliate Real Estate Capital Europe were on the ground at Expo Real in Munich this week, hosting panel discussions and holding more than a hundred meetings with senior executives from across the private real estate market. So this week, The PERE Podcast brings you an informed dispatch on one of the biggest talking points of the week: Europe’s rising prospects, based on an anticipated rise in defense and infrastructure investment.
When NATO members pledged in June to spend as much as 5 percent of GDP annually on defense and critical infrastructure by 2035, private real estate market participants quickly began assessing the ways such spending could spur demand for real estate. These early insights were captured on prior episodes of The PERE Podcast this summer, which you can listen to here and here.
This week, the topic is gaining momentum again, with managers and investors at Expo Real eager to share their perspectives on European real estate’s potential NATO uplift and the markets and sectors that stand to benefit most. But it remains early days, and these policy drivers could be subject to change. How likely is it that defense-related real estate will form an asset class in its own right? Is the opportunity being overstated? And what types of challenges could come with investing in such a sector?
Listen as PEI real estate editor-in-chief Jonathan Brasse, PERE EMEA editor Charlotte D’Souza and Real Estate Capital Europe editor Daniel Cunningham talk to host Lucy Scott about what they heard in the halls of Expo Real this week. Then later in the episode, hear from Kevin Mofid, head of EMEA Industrial and Logistics Research at real estate services firm Savills, who takes listeners through the firm’s own calculations and why it predicts “substantial growth” on the horizon for industrial and logistics strategies.
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Growth reversed: Declines hit real estate’s top allocators
The release of PERE’s annual Global Investor 100 ranking of private real estate’s top allocators comes with a somber headline for asset managers: For the first time in the ranking’s history, the world’s top 100 property investors saw their total allocation to the asset class decline from the year before.
But that is far from the only intriguing takeaway from this year’s list. On this episode, we take a deep dive into the GI 100 as host Greg Dool sits with PERE’s EMEA editor Charlotte D’Souza to discuss shifts in the ranking among Asia-Pacific, European and North American investors, as well as different investor types, and what they suggest about the ongoing movement of capital in the asset class. We also hear from PERE editor Evelyn Lee about the market context behind these shifts and what participants can expect moving forward.
Later in the episode, PEI Group real estate editor-in-chief Jonathan Brasse sits with Dimme Lucassen, managing director and head of the European real estate team at capital advisory firm Evercore, for his view on the findings, the outlook for real estate and the broader relationship between transaction markets and valuations.
The PERE Podcast features a weekly discussion between members of our senior editorial team spanning formation, strategy and deployment, and regularly draws from the ongoing coverage of PERE, as well as affiliate titles PERE Credit and PERE Deals. We also occasionally host sponsored interviews providing analysis-led commentary about the biggest events in private real estate capital markets around the world.
Ireland