The hunt for relative value amid evolving risk and reward profiles is never-ending, but in recent years the task has been complicated by uncertain interest rates, the residual results of the COVID-19 pandemic, the looming threat of recession, and excruciating gyrations in government and geopolitics.
Some property sectors have seen routs lately, such as certain central business districts, a warning to any investor who wants to go all in on a major transaction. Big deals mean big exposure and sometimes shrinking exits.
One way to diversify risk is to go smaller, even if staying within a segment. But small deals eat up time and resources in much the same way a larger deal does. For institutional investors with huge amounts of cash to move and attendant overhead, does going small work?
Limits to scaling down
Sometimes small is just too small, at least for institutional players.
“One of the most significant constraints is bandwidth. F
