ISA Focus: Investing in real estate debt

While traditional banks’ appetite for providing commercial real
estate loans has declined, other lenders (including investment
management firms such as LaSalle) have moved in to fill the
funding gap. As a result, we have recently seen increasing
interest from institutional investors in real estate debt.


But what is it about real estate debt that makes it a compelling
investment? As the second largest of the “four quadrants” of real
estate, it has a value in the US and Europe alone of
approximately US $4.5 trillion, representing an enormous
opportunity. Real estate debt historically has produced
competitive risk-adjusted returns in addition to showing low
correlation to other assets.


In our latest research, we examine the three-part case for
investment, including:


Real estate debt’s place in institutional portfolios,

The role of non-bank lending, and

The debt opportunity today, which takes advantage of a
looming debt funding gap and attractive pricing.






Contributors:


Brian Klinksiek


Global Head of Research and Strategy





Dominic Silman , PhD


Europe Head of Debt and Value-add Capital Research and Strategy





Jen Wichmann


Senior Strategist, Research and Strategy





Hina Yamada


Senior Research Analyst, European Research and Strategy