Research Reports

Asia Pacific real estate markets are stabilizing as interest rates ease and investment activity rebounds. This report highlights key drivers behind renewed momentum and sector-specific trends shaping the outlook.

Private markets are increasingly central to institutional portfolios. Shifting demographics, accelerating digitization, and the global push toward decarbonization are creating compelling opportunities across private real estate, infrastructure debt, investment grade private credit, and direct lending. As investors seek steadier income and growth in an evolving market environment, private markets are increasingly well-positioned as part of long-term portfolio construction. Discover why private market exposure has evolved from an optional allocation to a strategic one.

In 1977, Congress amended the Federal Reserve Act, directing the Board of Governors of the Federal Reserve System and the Federal Open Market Committee (FOMC) to "maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates." At times, the policy choices likely to advance one goal may not be appropriate to advance the others. At the Federal Reserve’s oft anticipated Jackson Hole policy summit in August, Fed Chairman Jerome Powell ushered in the beginning of the next period of monetary policy easing by citing the emerging change in the balance of risks in the U.S. economy as worries over inflation give way to perhaps greater concerns for labor and unemployment. Reflecting this, the FOMC agreed in September to lower the Fed’s overnight borrowing rate by 25 basis points with an expectation of additional cuts over the next 12 to 18 months as new economic data warrants. To this point, the FOMC voted to lower the policy rate by an additional 25 basis points at their most recent meeting during the last week of October.

Key Questions and Preview Answers for 2026: 1. What are the effects on real estate from K-shaped household income growth, and AI effects on the labor market? Risk for select office and retail segments, although office is still priced too low in select markets/ segments. A tailwind for select residential. 2. How long do multifamily margins compress in the Sun Belt? We expect late 2027. 3. Is industrial still mispriced for growth or correctly priced for stability? We have high-conviction views on infill vs regional warehouse pricing. 4. Are data centers in a bubble? Maybe, but modern portfolio theory has something to say too. 5. If real estate prices troughed in 2024, why are investor allocations to real estate still shrinking? Because of the magnitude of CRE underperformance since 2021.

Many portfolios today are meaningfully exposed to AI-driven and Mega-Cap tech stocks. While these areas have delivered strong recent performance, markets tend to move in cycles—making diversification essential for sustaining long-term results. REITs offer a compelling hedge by providing exposure to essential property sectors with low correlation to large-cap technology. The distinct return profile of real estate, coupled with the liquidity of publicly traded securities and the stability of underlying real assets, makes REITs an attractive way to broaden portfolio resilience while still participating in structural growth trends.

Diversifying sources of risk in a portfolio is more important than ever. Listed real assets are compelling alternatives, offering low correlations to more concentrated mega-cap tech names. Global listed infrastructure (GLI) continues to stand out as a timely and resilient solution. Conditions that support an allocation in 2026 include: Relatively low sensitivity to shifts in the macroeconomic outlook, attractive entry point to broader equities, with many sectors offering upside potential, and robust fundamentals and earnings outlook that provide a foundation for future earnings performance.

This research piece highlights critical trends in the U.S. housing market that present compelling investment opportunities. Three themes define the U.S. housing market today: 1) Rentership remains a cornerstone at approximately 35% of households, 2) the rental market extends well beyond apartments, and 3) the central challenge is not simply undersupply, but a mismatch between the types and locations of housing and where demand exists.

The U.S. light industrial sector continued its steady performance through the third quarter of 2025, outperforming broader commercial real estate segments amid ongoing market recalibration and economic uncertainty. Limited new construction in sub-100K SF product has preserved historically low vacancy levels, sustaining pricing power and rental growth across Tier 1 and Tier 2 markets. With supply constrained and tenant demand steady, small-and mid-bay assets remain among the most resilient and sought-after industrial property types. Investor sentiment deepened further in Q3, supported by an improving lending environment and consistent capital flows into the small-bay segment. Transaction activity under $100 million once again dominated sales volume, while cap rate compression reflects the depth of institutional interest in this asset class. Light industrial’s resilient fundamentals—diverse tenant bases, shorter lease terms, and location flexibility—continue to provide a durable hedge against broader market volatility.

Private commercial real estate continues to mature and evolve. In recent years, investors have increased exposure to alternative sub-sectors within the asset class that offer differentiated demand drivers and the potential to outperform core real estate sectors. Healthcare real estate, which includes medical outpatient buildings (MOBs), has quickly gained investor interest, for good reason. Medical outpatient buildings present a rare combination of strong fundamentals, demographic tailwinds and an attractive entry point. This sector has delivered superior risk-adjusted returns while maintaining remarkable resilience through economic cycles, creating what we view as a multi-year opportunity for outsized returns in this specialized real estate sector.

Real estate investors and managers frequently rely on qualitative market risk assessments but, in many cases, do not give appropriate consideration to quantitative assessments that are readily available. Put and Call options on REITs provide forward-looking risk indicators that incorporate both historical property sector trends and views on the outlook. Public markets currently suggest that net lease retail is less risky than apartments, even though investors are accepting lower yields for apartments.