The coming year will offer historically advantageous entry points into private real estate as asset prices meaningfully reset, wrote James Corl, head of private real estate at Cohen and Steers, in a recent white paper.
Cohen and Steers views this as an attractive opportunity, as such significant declines in private real estate occur once every 10–20 years and have historically resulted in subsequent strong return vintages. The firm believes the current repricing, which is about two-thirds complete, will result in the same. The sell-off and subsequent recovery will be disparate, however, with the weakest properties (older properties in coastal gateway markets) hit hardest and the strongest properties (newer, amenity-laden real estate in Sunbelt locations) experiencing the most robust recovery.
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