Liquidity, pricing (yield) and net operating income growth are arguably the three most important performance factors when investing in private real estate, especially in today’s environment. The current real estate expansion is quickly becoming the longest in the post–World War II era. The record is held by the expansion of the 2000s, which ran from November 2001 until December 2007. The current expansion could tie this record if it lasts until June 2019. The fact it has had such a long run has brought to the forefront of economic debates the question of precisely how much longer it can last. Although some indicators suggest persistent strength in growth, others point to growing imbalances that could derail the expansion. And the possibility exists an exogenous event, or black swan, could cause a derailment, too.

In this environment, investors in private real estate need to stay focused on a few factors. First, yields are at or near historic lows across property types and