Inflation continues to soar and investors—from the consumer/retail level to the biggest family office, investment, public pension, and sovereign wealth funds—are on the hunt for hedging.
Commercial real estate has long been seen as a natural inflation hedge, but automatic assumptions need some reconsideration.
"It has been decades since we have seen an extended period of high inflation," Drew Thornfeldt, managing director and global head of real estate investment banking at Chatham, tells GlobeSt.com. "Since that time, the real estate market has changed dramatically—shifting to a global institutional asset class. Data for real assets typically lags other asset classes, and since there have only been a few quarters of elevated inflation, it is challenging to draw decisive conclusions on real estate's effectiveness to hedge inflation in general."
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