The current downturn in the U.S. real estate industry, largely catalyzed by higher interest rates and shifts in demand following the COVID-19 pandemic, creates opportunities to generate enhanced value but will require executing a focused, selective, and hands-on strategy and partnering with a manager with experience across periods of dislocation.

While the downturn has impacted all real estate investments to varying degrees, not all property types and markets are expected to be positioned for a rebound in value in the coming years. Interest rates should not be expected to return to pre-2022 low levels in the coming years and factors such as shifting demographics and evolving tenant needs have dramatically altered demand. For these reasons, it is important to invest alongside an experienced manager with a long and successful history of real estate investment and value enhancement in dynamic market environments.

State of play: A valuation reset creates a new inve