Nearly three-fourths of investors believe commercial real estate assets are overvalued, which could mean storm clouds are on the horizon for the sector next year as a recession looms.
Preqin's 2022 November investor survey reveals that 74% of investors believe real estate assets are overvalued, with fund managers saying they expect valuations to fall. Globally, 249 funds had closed as of the end of the third quarter, 46% of the full-year total in 2021, with aggregate capital totaling $101.9 billion (48% of 2021's $210.7 billion total).
Value-added funds accounted for almost 40% of funds closed by end of the third quarter, an increase over the long-term average of 32%. Valued-added funds accounts for 35% of aggregate capital raised, or $35.6 billion, "far above" the 2001 to 2021 average of 27%, Preqin analysts say.
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