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Research - MAY 15, 2019

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Investors feel there is too much money in the market

by Andrea Zander

Investors are increasingly concerned there is too much money in the market and there will be a cyclical market peak, according to the Real Estate Trends for 2019 report by Probitas Partners.

Although fundraising for closed-end real estate funds rebounded in 2018, those fears remain. Value-added and opportunistic strategies dominated the fund market, making up two-thirds of capital raised. However, there remains more interest in core and core-plus strategies among direct investors in real estate.

North American–focused funds remained the leading fundraisers in 2018, while European-focused funds ranked second. There was very little activity in the emerging markets outside of Asia. The multifamily sector remained the top sector preference among investors. But niche sectors are continuing to draw interest.

There was also significant activity in the real estate debt market, which made up 21 percent of capital raised in 2018.

 

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