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More cautious and selective US investors favour opportunistic and value add strategies

Over the last two years, inflation turned out to be not transitory but entrenched forcing the Federal Reserve to enact the fastest rate hiking cycle in recent memory. As a result, bond yields have been rising and real estate’s search-for-yield advantage evaporated. More worryingly, real interest rates moved out considerably with the 10-year TIPS yield rising to 2.0% from -1.0%, which adversely affects core real estate strategies, which are supposed to offer protection against inflation through rental increases.

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The impact of the adversity was felt throughout the industry and investment dropped across all sectors while yields moved out. On a sector basis, (...)

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