New core report sheds light on fundraising, dry powder and emerging technologies amid COVID-19
SEATTLE, March 25, 2021 /PRNewswire/ — PitchBook, the premier data provider for the private and public equity markets, today released its first bi-annual global real estate report, which found the COVID-19 pandemic led to significant short-term market dislocations and accelerated long-term structural changes in both commercial and multifamily real estate. The report delves into recent macro trends in real estate through the lens of private market fundraising and performance, offering insight into the availability of capital and allocation potential across regions and real estate sub-strategies like core, core plus, value-add, distressed, opportunistic and debt.
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“After displaying remarkable resilience early in 2020, global real estate fundraising fell sharply from the record high raised in 2019 as uncertainty from COVID-19 lingered,” said James Gelfer, Head of US Private Market Research at PitchBook. “Investors closed fewer funds than at any point since the global financial crisis and the amount of capital raised was the lowest since 2013. The beginning of 2021 has been sluggish for real estate fundraising, too, and this trend seems likely to continue as there are few large funds in the market at present.”
Key Takeaways from PitchBook’s H2 2020 Global Real Estate Report
Global real estate fundraising weakened considerably in 2020. Firms were able to keep activity steady in the first half of the year, but by year end, fund closings had ground nearly to a halt. Activity was particularly soft in North America and Europe, while Asia was resilient during the tumultuous year.
Dry powder levels remained relatively flat through the first half of 2020, sitting just above one third of $1 trillion. Approximately half of that capital sits in distressed or opportunistic vehicles. These figures may fall as the COVID-19 pandemic presents a prime buying opportunity in certain strained property types and geographies.
Industrial and self-storage were the only property types to record positive total returns in 2020. This strong performance during the pandemic caps off a five-year run during which returns for industrial properties far outperformed all other property types. As the pandemic caused many to forgo elective medical procedures, skip vacations, and work and shop from home, healthcare, office, retail, and lodging all fell.
Real estate technology has grown rapidly over the past decade, though VC deal flow fell in 2020 to $9.1 billion. Flexible office space, warehouse utilization, tenant engagement, and data analytics are areas of particular interest as the world transitions from pandemic-induced lockdowns to the next cycle in the real estate market.
To learn more about the work and analysis available from the PitchBook Institutional Research Group, click here.
PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company’s data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, San Francisco, New York and London and serves more than 50,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary.
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