Publications

- Feburary 1, 2009: Volume 21, Number 2

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A Primer: Real Estate Secondaries

by Scott Landress

Scott Landress, CEO of Liquid Realty Partners, answers this month’s reader’s question: “What should I know about real estate secondaries, and how can they help my portfolio?”

Real estate secondaries have emerged as a critical component of the real estate private equity asset class, but they remain poorly understood. Deals are confidential, information is sparse and myths abound. With market forces currently generating unprecedented secondary transaction volume, it is high time to set the record straight.

A “secondary” is generally considered the second exchange of a private investment interest. Given the wide variety of ways capital is formed in real estate, an experienced secondary buyer can buy more than just fund interests. Secondary sellers, particularly those seeking to avoid NAV or cost write-downs, can consider offering interests in separate accounts, joint ventures, debt instruments and other private investments, in addition to their fund i

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