KKR has invested more than US$2 billion in multifamily properties
Investment firm KKR has acquired more than US$2 billion worth of multifamily properties. Developer Quarterra previously owned the properties. A developer-financed closed-end fund completed the transaction. The portfolio consists of 18 buildings with 5,200 units. The properties are in various regions of the US, including California, Texas, Florida and New Jersey.
The US and global real estate markets continue to struggle. The office sector has suffered the most, with analysts predicting a downturn on a par with the 2008 crisis. However, financial firms are more optimistic. They believe the sector’s collapse peak has passed, and the market is recovering. Non-bank lenders are rushing to take advantage of the situation to make big profits. They expect returns to return as demand for property increases and house prices rise.
KKR’s Justin Pattner notes an increase in transaction activity. This bodes well for commercial property investment, which has endured tough times over the past two years and is now stable.
Multifamily properties market forecast
J.P. Morgan has published its outlook for the property market. It sees good prospects for the sector until the end of 2024. However, risks remain as high interest rates continue to exert pressure. The analysts note positive trends in several areas:
– demand for residential property is growing;
– the industrial segment is showing good activity;
– retail development is contributing to the demand for retail space;
– there is also interest from tenants and investors in office property.
According to J.P. Morgan experts, prices will stabilise in 2024. In addition, the number of transactions, lending, and CMBS issuance will increase. In these areas, the analysts forecast activity growth of 25-30%.
Since the year’s second half, the market has seen an increase in fraud prevention efforts. In addition, many companies are looking for ways to optimise the liquidity of their assets.
The commercial property sector is susceptible to interest rates. As a result, market participants are waiting for interest rates lowered by the major central banks, including the Fed. However, it is essential to remember that low interest rates mean less profit and less liquidity. Given the statements of many regulators on the revision of interest rates, investors are in a hurry to make deals.
The market remains under pressure from the geopolitical situation worldwide. This creates instability and forces buyers to be extremely cautious, which could be a limiting factor in the market’s recovery. At the same time, analysts note increased activity in the residential sector. Forecasts for the industrial property market are optimistic. At the same time, the office property market continues to face difficulties.