Why is Private Equity Real Estate Preferred by Investors?

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Why is Private Equity Real Estate Preferred by Investors?

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Private Equity Real Estate?combines long-term earning potential and effective diversification?beyond the stock market, making it an attractive investment. This leads to an increase in?individual investors entering the segment which up until recently was dominated mostly by?institutional investors.

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Private Market Real Estate can be an optimal addition to many investment portfolios due to it being less affected by market fluctuations. This helps reduce risk, especially in times of uncertainty and is an important addition for investors who are largely invested in the stock market, giving them an option that is less volatile and is more suited for the long term.?During stable economic periods private real estate can create consistent income,?which is mostly generated from returns such as rent payments from the assets.?Nowadays, the high interest rate environment can affect the asset’s cash flow, and since private real estate is a rather long-term investment, it has time to recover from

unstable periods and return to creating consistent and even stronger income.

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Additionally, many?Private Market Real Estate?markets are known for their stability and show forecasts of long-term growth. For instance, the US rental market has shown growth in demand over the last decade, with increasing rent prices.

This is mainly due to the high?mortgage rates making it almost impossible to purchase a home in the US, leaving many individuals in the rental market. Also, an example of a?market showing increasing demographic growth in the past decade is the US Sunbelt,?as seen on the below graph. The Sunbelt "boom" is primarily driven by a higher quality of life including lower taxes, housing, comfortable weather, and job opportunities. The growth in population, and corporations that are moving their offices to the area is motivated mostly by greater economic opportunity and affordability.?

An additional advantage in?Private Market Real Estate?is the asset allocation. Some investors like to invest in individual deals, “putting all their eggs in one basket”.?Private real estate allows you to diversify across different markets and asset types, thereby lowering the overall risk of your investment.

Following the discussed perks of investing in private real estate, the current timing has its opportunities.?The hike in interest rates which led to an increase in cap rates, have?temporarily driven real estate prices down, leading to an opportunity to buy low.

According to the Federal Reserve now is the most attractive period for opportunistic?

investments since 2008.?We see individual investors and wealth management family

offices increasing their allocation to private real estate.

Private real estate has been proven?to be more resilient, with improved risk/return characteristics.

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At times like this, we see many opportunities to buy low and seize the market opportunity. The graph below published in January 2024, was taken from JP Morgan’s Family Office Report which interviewed 190 family offices (144 from the US) with an average total net worth per family office of $1.4B.

The graph shows that family offices’ biggest allocation for their clients is alternative investments.

Feel free to reach out If you would like to receive more information regarding the opportunity funds that are currently open for investments.

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Invest With Us

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Sincerely yours,

Electra Real Estate?

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This document describes in general the activity and business principles of the company. This presentation is intended for general information purposes only and should not be treated as an o?er or recommendation for investment, for the purchase of interest or for the acquisition of any kind of securities of any corporation. In addition, this presentation can’t be construed as investments consultation.

Any information set forth herein (if any) are non-binding forward-looking statement, and are subject to known and unknown risks, uncertainties, and other factors, which are difficult to predict, and which may cause our actual results to differ materially and adversely from those implied by the forward-looking statements. It is further clarified that past performance cannot assure any future results, and that the delivery of this publication does not create any commitment to update the information contained herein.

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