Profimex Market Review Update – April 28, 2021
The Urban Apartment Recovery Will Take Some Time
A recent report, published by Trepp, showed that an increasing number of US cities faces apartment vacancies of more than 20%. As a result of this finding, Yardi Matrix, analyzed these markets to find out how long it will take them to reach pre-pandemic occupancy and rental levels. The result of its study shows that it will take primary markets longer than secondary due to their large decline in property fundamentals, such as New York and The Bay Area, where rents have dropped by more than 10%. According to Yardi, it may take New York City as long as five years to reach Q1 2020 rent levels.
Pandemic takes toll on real estate fundraising in 2020
According to the INREV/ANREV/National Council of Real Estate Investment Fiduciaries Capital Raising Survey 2021, global real estate sponsors raised in 2020 more than €123 billion in new capital, a number well below the previous year’s record of €196 billion. Most of the equity, €51 billion, went into European strategies, while the US attracted only €29 billion, significantly less than 2019’s €73 billion and €51 billion, for European and US strategies, respectively. “60% went to non-listed funds, 17% went into separate accounts investing directly and 12% went into non-listed debt products, according to the survey. The remaining 11% combined went into funds of funds, joint ventures and club deals and separate accounts investing indirectly.”