Income returns and the current real estate cycle

A theme that has been on trend recently is the growing preference for income returns and it is reflective of where we are in this late cycle environment.

Cormac Doddy, vice president at Stockbridge states that cap rates have probably compressed as far as they will go in most markets across the U.S. and looking ahead for both core and value investing income is going to be critical.

“Just thinking about where we are in this late cycle and how that effects value investing, I don’t think there is necessarily a particular right time in the cycle for value investing,” says Doddy. “However, I do think right now maintaining a defensive approach with a focus on income returns within a value fund portfolio will provide that cushion to any downside risk that may emerge.”

To hear about this approach and how it is effecting Stockbridge’s fundraising, click here.