Primed for Growth: Secondary Market Heats Up as More Investors Consider Trades
During the past year, numerous investors and market participants have inquired about the true level of activity in the secondary market and the opportunity to acquire real estate fund and partnership interests through such transactions. The simple answer to their question is that the dislocation, which has impacted the global economy and specifically the real estate sector, has stimulated activity in the real estate secondary market. However, to elaborate it is necessary to go beyond the market disorder and consider the significant growth of private real estate fund commitments made in recent years. The increased base of commitments to private real estate, in parallel with the current disorder, has propelled the real estate secondary market to come of age.
The upsurge in primary commitments from 2001 to 2008 created a base of real estate assets in private funds and partnerships that is unprecedented. A portion of this pool of private investments is currently turning over