Inflation Fears Could Fuel Investment in Real Estate

Lewis Center, OH, March 4, 2022-In the McKinsey & Company Global Private Markets Review 2022, it was pointed out that ‘investors’ fear of continued inflation could provide a new tailwind for real estate fundraising, or at least a different reason for allocating to the asset class.

“But if the recent surge in prices persists, real estate may well shift back to playing the inflation hedging role it once did in investors’ portfolios prior to the Great Financial Crisis (GFC.)

“Older office buildings, which may not meet the needs of today’s hybrid workforces, have suffered: JLL reports office properties built in 2014 or before had a collective negative 199 million square feet of absorption, while absorption of office properties in the United States built after 2014 totaled a positive 51 million square feet over the seven quarters ending December 31, 2021.”