For institutional real estate investors who are engaged in the business of maximizing returns on illiquid assets, any year can be a dicey one — that is, a 12-month stretch in which property values are squeezed and escape hatches shut — and 2025 is certainly no exception.

Any four seasons can offer wars, elections, pandemics, currency slumps, government collapses, debt defaults, natural disasters and resource shortages, or perhaps even climate change–induced calamities.

In 2025, add to the usual brew of turmoil the possibility of higher interest rates in the United States, especially if investors balk at financing skyrocketing federal government debt loads or if inflation cannot be tamped back down. The bond-market vigilantes may make a comeback. Then, too, the doomsters are already muttering darkly about an economic recession in the months ahead.

Investors of all stripes at times must be intrepid or stay on the sidelines, hiding underneath a pile of short-