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Is commercial real estate debt the superfood of real estate investment?

Jack Gay
Global Head of Commercial Real Estate Debt
Vegetables on display
For real estate investors seeking secure returns, private debt is an increasingly inviting strategy given the current environment, which is marked by low returns from fixed income investments, high prices for equity investments that may appear risky and political uncertainty in many regions

"The sector is becoming more mainstream than it was five to seven years ago. Commercial real estate (CRE) debt used to be more of a niche play and now an allocation is becoming part of institutional investors' fundamental line-up," commented Jack Gay, Head of Debt Real Estate. Jack has dubbed debt the real estate investment industry's superfood. "It may not be as appetizing as equity, but it's really good for your portfolios."

Fuel your performance with these top five ingredients:


Potential income

Blueberries can lower your risk of heart disease and improve your memory by protecting the brain from inflammation and boosting communication between brain cells.
Looking for a healthy addition to boost your income? Well-structured CRE debt offers the potential for stable, income-focused returns at attractive relative yields.

Diversification

A half-cup of spinach provides more than five times of your daily dose of vitamin K, which helps to build strong bones.
Meanwhile, CRE debt can strengthen the structure of your portfolio by acting as a diversifier to fixed income, direct real estate and wider investment markets

Market opportunity

Green tea has a combination of powerful antioxidants, which can reduce free radicals in the body, protecting cells and molecules from damage.
Seize the day by adding a cup to your morning routine for long-term anti-aging and disease prevention benefits, just as alternative lenders are taking advantage of structural changes in the market to originate CRE debt investments at attractive, risk-adjusted returns.

Stability

One portion of sweet potatoes delivers more than 450% of your daily dose of vitamin A, which protects your vision and your immune system.
See the market clearly and protect your health for the long term by accessing potential attractive risk-adjusted returns, relative to fixed income and direct real estate investments, particularly late in the cycle

Diversification

Brussels sprouts have more glucosinolates (compounds that combat cancer and detoxify our bodies) than any other vegetable.
Need a tonic to prevent capital depreciation? CRE debt occupies a more secure part of the capital stack than equity, offering a measure of downside and performance risk mitigation through the buffer of the borrower’s equity and excess rent.

Our debt expertise

Commercial real estate debt
Our global debt platform invests across the capital structure, seeking income-focused, stable and attractive, risk-adjusted total returns for investors through a diversified portfolio of investments. We have been active in the commercial real estate debt market since 1934 and have more than 50 seasoned experts around the world.
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Note: The value of investments and the income from them may go down as well as up and are not guaranteed.

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