Principal Asset Management: The case for private U.S. CRE, a more challenging environment

While the global investment landscape may call for a more cautious risk-off approach over the next year, given higher-than-average inflation, elevated policy and borrowing rates, and increased risk of recession, asset classes that dampen volatility, reduce correlation to global markets and generate income remain at the forefront for prudent investors, according to Principal Asset Management in its July report.

At its core, U.S. commercial real estate remains an asset class that benefits from positive economic and demographic fundamentals. Although the near-term macroeconomic outlook remains uncertain, regional diversity across metro areas within the U.S. economy offers investors a diversification hedge to investors not available in most asset classes. In addition, with the increased stability of its income return, U.S. commercial real estate provides risk-adjusted returns allowing investors to take advantage of potentially increased returns and the reduced risk of a well-dive