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Principal Asset Management - Thu, 10/03/2024 - 16:22

Why it’s (still) a good time to invest in private real estate credit

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We believe it’s a good time for debt. Benefits include diversification—a lack of correlation to other asset types— as well as returns comprised primarily of income, attractive relative value, and equity cushion to absorb asset stress due to unexpected events. Given current market opportunities, private real estate credit looks particularly attractive today.

AT-A-GLANCE

Private real estate credit funds continue to see steady growth in assets under management, and it’s easy to see why:

  • Traditional lenders have continued to pull out of the commercial real estate market. At the same time, demand continues to rise (the wall of maturities is now $2 trillion, according to the Mortgage Bankers Association). This combination has created a lender’s market, with favorable conditions including rising spreads and total yields.
  • High interest rates have driven capitalization rates higher, which has created opportunities for new investments sized to reset values—generating fresh equity buffers, lower exposure levels, and higher returns.

The opportunity for private real estate credit

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Principal Asset Management

With public and private market capabilities across all asset classes, Principal Asset ManagementSM and its specialist investment teams are focused on harnessing the potential of every opportunity to secure an advantage for its clients.

The 27th largest manager of worldwide institutional assets under management of 434 managers profile, Principal Asset Management applies local insights with global perspectives to identify compelling investment opportunities and deliver distinctive solutions aligned with client objectives.1

Principal Asset Management is the global investment management business for Principal Financial Group®  (Nasdaq: PFG), managing $553.1 billion in assets and recognized as one of the “Best Places to Work in Money Management” for 12 consecutive years.2,3

Learn more at PrincipalAM.com.

1 Managers ranked by total worldwide institutional assets as of December 31, 2022. Pensions & Investments, “Largest Money Managers,” June 2023. 
2 Principal Asset Management AUM as of June 30, 2024. 
3 Pensions & Investments, “The Best Places to Work in Money Management” among companies with 1,000 or more employees, December 2023. 
Principal Asset ManagementSM is a trade name of Principal Global Investors, LLC.

Edward Kakenmaster  
Managing Director, Insurance Sales & Relationship Management  
Kekenmaster.Edward@principal.com  
+1.515.878.1334

711 High Street  
Des Moines, Iowa 50392

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