The U.S. commercial property scene, especially the office sector, has struggled in the post-COVID-19 era, as the work-from-home movement was first mandated but then became popular in many quarters. Some high-cost cities post-pandemic stopped growing demographically and economically, trends that were aggravated as the Federal Reserve pushed interest rates higher, thus relatively lowering the value of all properties.
Foot traffic indicators, public transit levels and card swipe tallies in many central office districts remain depressed.
The result for many open-end funds was predictable: Beginning in earnest in 2022, too many institutional investors wanted out of the open-end property funds — but fund operators did not have cash on hand to honor redemptions and were loath to sell assets at below-acquisition prices to honor exit requests.
As a result, the open-end funds became anything but, as fund managers necessarily exercised their right to bar the exits.
