Many investors assume it’s best to buy real estate assets early in the cycle and build later as values rise. Historical data shows the story is more complex, however, according to Hines in its report To buy or to build?
Development often delivers the highest return premium relative to acquisitions early in the cycle, with diminishing benefits later. In fact, absolute development returns tend to decline in later phases, sometimes falling below levels that justify the risks. Hines Research’s 2024 Outlook offers a framework for evaluating these dynamics, combining fundamentals, capital markets, and cyclical risk into a structured buy/hold/sell model.
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