From a small northwestern observatory…

It was a great month for the market as a whole and real estate in particular. ACCRE earned 7.08% in July, and is now back up above where it stood on Jan 31 (roughly, before the short bear market). Comparatively, the S&P earned 5.51% in July, and the S&P Global Real Estate Index earned 3.08%.

Why is real estate doing well? In part, because the market as a whole is doing well, and there is a lot of liquidity flowing into blue chips and safe vehicles. Further, the soft sectors in real estate were obvious from the beginning — big retail, hospitality, and such. Those tanked early. ACCRE was out of those sectors before the melt-down, so didn’t suffer as badly as the Global Real Estate index. Successful RE fund strategies this year have been fairly obvious — data centers, some industrials, selected office funds, and infrastructure. Of course, not all strategies are alike — some apartments, for example, are heavily weighted in student or senior housing. Some industrial are tied more closely to retail. Some offices are doing well, and others are exposed in the wrong areas. It’s all in the details, as they say.

Anyway, we hope your investment strategies are doing well. We’ll be back mid-month with our diversification report. Until then, best wishes, and stay safe!