One consistent theme among industry participants is that debt investments will continue to appear attractive in the current late-cycle environment.
“Investing in a debt fund context can be compelling in a late-cycle environment,” says Charlie Rose, managing director and portfolio manager at Invesco Real Estate. “Fundamentally, debt funds are putting capital to work with a significant cushion to value and are generating returns generally from mid to high single digits on a current basis. Accordingly, the total return profile remains attractive, and the current income profile is probably more attractive than most equity products. This, combined with the strategy’s defensive posture by virtue of being structured in a senior portion of the capital stack, is attracting capital from real estate allocations to debt funds.”
“The relative value of investing in debt or e
