Wed. Sep 20th, 2023
    The Changing Landscape of Investment Opportunities: From High-Yielding BDCs to Direct Investments

    Summary: Traditional investment options in the stock market are offering lower yields, leading investors to explore alternative opportunities. Business development companies (BDCs) have emerged as a viable option for those willing to take on a certain level of risk. These companies raise money from public stock investors and lend it to small, often private, companies. By tapping into high-yielding private markets, BDCs provide individual investors with access to sectors that are typically only available to larger institutions.

    In the real estate industry, Yardi Systems and 18 property management companies have been accused of rent-fixing in a class-action lawsuit. The lawsuit alleges that they used Yardi’s RENTmaximizer tool to automate rent increases, creating a cartel that raised rents across their properties while keeping vacancies low. This legal battle highlights the importance of fair competition and transparency in the rental market.

    Meanwhile, amidst the uncertainties of the pandemic, the European owner of Westfield malls is reconsidering its plan to exit the U.S. market. Unibail-Rodamco-Westfield, one of Europe’s largest mall operators, intends to hold onto some of its top-performing malls beyond its initial deadline for selling off its American portfolio. This decision reflects the confidence in the high-end mall business and its potential for continued success.

    Family office clients of Citigroup Inc. are actively seeking direct investments in private markets. These clients, representing a significant net worth, are looking for attractive valuations in sectors such as technology, real estate, and healthcare. Direct investments provide them with the opportunity to invest directly in companies or assets, bypassing intermediaries such as funds.

    In the construction sector, the Dodge Construction Network’s latest report reveals a decline in momentum. The commercial side of the industry experienced a modest drop, while the institutional sector saw a steeper decline. This decline is attributed to weaker activity in sectors such as education, healthcare, and amusement. However, the multifamily sector is expected to see a resurgence in rents by spring 2024, with robust increases predicted for 2025.

    California lawmakers have approved legislation to expand laws that allow developers to expedite housing construction in cities that are falling behind on their construction goals. This move aims to address the housing shortage and increase the availability of affordable housing options in the state.

    Japan’s Government Pension Investment Fund (GPIF) is actively searching for a new head of real estate. With significant assets under management, GPIF is seeking a senior investment professional with experience in both Japanese and overseas real estate markets. The vacancy for this position has been ongoing since April, and filling it remains a top priority for the fund.

    In the midst of WeWork’s efforts to exit leases, former CEO Adam Neumann is reportedly seeking to lease space at one of the buildings previously occupied by the co-working company. This revelation exposes the irony of Neumann’s involvement in the leases that WeWork is looking to exit.

    Lastly, rural America is experiencing a population boom, which is boosting local economies but also straining resources such as schools, housing, and roads. While this growth is positive for these communities, it is also causing resentment as house prices surge due to the increased demand.

    – The Wall Street Journal
    – Bisnow
    – Commercial Property Executive
    – Bloomberg
    – Los Angeles Times
    – PERE News
    – The Real Deal