Real estate private credit is not replacing core real estate in institutional portfolios, but it is changing how investors think about defensive income, according to Greg Eudicone, head of global real estate client portfolio management at Barings, in an exclusive interview with IREI.
Rather than viewing private credit as a substitute for core real estate equity, the better framing is that the income allocation is evolving. Core real estate and real estate debt both have long-term roles to play, but higher interest rates, reset property values and greater demand for downside protection have made credit more compelling in the current market environment.
“We view it less as private credit replacing core real estate and more as the income bucket evolving — both assets have a role long-term. The expansion into real estate debt, in our view, is a structural evolution that began with cyclical dislocation but is now becoming a more permanent feature of institutional portfo
