“Alternative Investment Strategies Attract Institutional Investors”

Experts in the commercial real estate sector have offered insights into how institutional investors are adapting to the Federal Reserve’s recent rate hikes. Excelsa Properties’ Managing Director and Head of Acquisitions, David Fletcher, noted that “insurance volatility, and to a lesser degree inflation uncertainty remain overhangs” among institutional buyers. Staghorn Capital’s Grant Jenkins stated that many investors are opting for shorter-term fixed-rate financing options rather than traditional 10-year fixed money due to current interest rates. Brook Scardina of Oak Real Estate Partners added that capital is being directed towards alternative assets such as private debt and private equity funds for portfolio diversification purposes with an aim at optimizing performance objectives. Jonathan Needell from Kairos Investment Management Co., however, believes many investors may be waiting before taking action until they can assess if interest rates will remain steady or start decreasing by year end. Despite this potential decline in rates later on in 2023, Jenkins warned it could still be difficult for institutions to meet desired lending leverage which might require them providing more equity than usual when financing deals