CURRENT REAL ESTATE VALUATION IN A BROADER CONTEXT

Private real estate valuations, especially within the ODCE universe of core, open-end funds, have come under heightened scrutiny in the current cycle. Many market participants argue that reported values have lagged true market pricing, with appraisals slow to adjust to a higher interest rate environment. This dynamic has left many core assets valued at what appear to be artificially low cap rates, limiting transaction activity and delaying a true market-clearing process. However, as we progress through the cycle the picture has become more nuanced, where the very repricing that has weighed on sentiment may be setting the stage for renewed opportunity.