Private real estate investment could be the key to economic survival in the post COVID-19 pandemic world, according to research cited by a report from Black Creek Group.
“After an 11-year bull-market run, the global coronavirus pandemic has created extreme economic uncertainty,” the Black Creek Group said. “With so much volatility in the marketplace, investors are looking for ways to better diversify their portfolios. Private real estate has historically delivered low volatility and strong diversification benefits.”
The group cited research to show “private real estate is potentially durable enough to ride out market downturns.”
The report showed private real estate comparing favorably with equities, bonds and public real estate investment trusts. Also, the report cited a 20-year study showing private real estate as less volatile than equities or REITs.
“Given private real estate’s typically lower volatility and low correlation to equities and bonds and higher risk-adjusted returns, we believe it should have a place alongside equities, bonds and public REITs in a diversified investment portfolio,” the report said.