Finding opportunity in a period of falling valuations.

As liquidity has receded from the commercial real estate sector, interest in real estate secondaries has ballooned. Investors are particularly drawn to the ability to buy exposure to the underlying assets of a private real estate fund at discounts to reported value. At the same time, valid concerns that such funds do not yet sufficiently reflect recent sharp declines in commercial real estate values—and worse, that real estate values may continue to fall—beg the question: Is buying “discounted” real estate interests really a bargain?

In this Insights, Scott Koenig, Head of Real Estate Secondaries, explores how taking a fundamentals-driven approach can help investors to gain comfort with the sector.