Market
Memos from Howard Marks: Nobody Knows (Yet Again)
A Diverse and Evolving Investment Opportunity
Private Real Estate
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Recovering Market
The real estate market continues to rebound from recent headwinds, supported by lower interest rates, strong underlying fundamentals and renewed investor optimism. Transaction volume also picked up, supported by lower interest rates and an active debt capital market that saw CMBS issuance increase nearly threefold year-over-year.1 This renewed transaction activity is expected to create compelling investment opportunities.
1 Source: Green Street, Market Monitor, January 2025.
2025 Real Estate Outlook
Brian Kingston, CEO of Brookfield Real Estate and Dana Petitto, COO and Portfolio Manager of Brookfield REIT, discuss the outlook for real estate in 2025, sectors that are offering compelling investment opportunities and how Brookfield’s operations-oriented approach leads to value creation.
Potential Benefits of Investing in Private Real Estate
Real estate with its unique characteristics is an established asset class that we believe is an essential component in a well-diversified portfolio. In fact, institutional investors have long appreciated the benefits of allocating to private real estate, especially during periods of public market volatility and high inflation.
Income Generation
Private real estate has historically delivered higher income than bonds, with capital appreciation on top.
20-Year Annualized Returns
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Past performance does not guarantee future results. As of December 31, 2024. Private U.S. real estate represented by NCREIF Fund Index – Open End Diversified Core Equity (NFI-ODCE), U.S. equities represented by S&P 500 Index, international equities represented by MSCI EAFE Index and U.S. fixed income represented by Bloomberg Barclays U.S. Aggregate Index. An investor cannot invest in an index. Indices do not reflect the impact of transaction costs, management and other investment-entity fees and expenses or the costs associated with raising capital or being a public company, which lower returns.
The NCREIF Fund Index – Open End Diversified Core Equity (NFI-ODCE) is a capitalization-weighted, gross of fees, time-weighted return index that measures performance of the largest open-end commingled funds pursuing a core real estate investment strategy.
Source: Bloomberg, National Council of Real Estate Investment Fiduciaries.
Enhanced Risk/Return
Adding private real estate to a traditional portfolio has historically increased returns and lowered risk.
Returns and Risk Trailing 20 Years
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Past performance does not guarantee future results. Total return and risk as measured by standard deviation of quarterly returns for 20 years ending as of December 31, 2024, of a hypothetical portfolio as displayed of private U.S. real estate represented by NCREIF Fund Index – Open End Diversified Core Equity (NFI-ODCE), U.S. equities represented by S&P 500 Index, international equities represented by MSCI EAFE Index and U.S. fixed income represented by Bloomberg Barclays U.S. Aggregate Index. An investor cannot invest in an index. Indices do not reflect the impact of transaction costs, management and other investment-entity fees and expenses or the costs associated with raising capital or being a public company, which lower returns.
Source: Bloomberg, National Council of Real Estate Investment Fiduciaries.
A Hedge Against Inflation
Private real estate has generated strong returns amid high inflation.
Average Quarterly Returns When U.S. Consumer Inflation Was Higher than Average1
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Past performance does not guarantee future results. December 31, 2004 - December 31, 2024.
1Higher-than-average inflation is measured as when the year-over-year U.S. Consumer Price Index exceeded 2.5%. During those periods, we examined the average returns of private U.S. real estate (as measured by the NCREIF Fund Index – Open End Diversified Core Equity (NFI-ODCE); U.S. equities (as measured by the S&P 500 Index); and U.S. fixed income (as measured by the Bloomberg US Aggregate Bond Index).
Source: Bloomberg, National Council of Real Estate Investment Fiduciaries.
Themes Reshaping Long-Term Opportunities
Shifting global dynamics are unlocking new and attractive investment opportunities.
Demographics
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Creating opportunities in: Housing, Science & Innovation, Self-Storage
The New Normal
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Creating opportunities in: Data Centers, Hospitality, Entertainment, Logistics/Fulfillment
Deglobalization
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Creating opportunities in: Science & Innovation, Logistics/Fulfillment
Brookfield Advantage
As one of the world’s largest and most successful real estate investors, Brookfield builds, owns and actively manages institutional-quality real estate companies and platforms that manage high-quality assets diversified across real estate sectors and geographies.
We believe our operational expertise, global reach and access to large-scale capital allow us to find value—and manage risk—across market cycles.
$271B
Assets Under Management
~26K
Operating Employees
500M+
SF Commercial Space
As of December 31, 2024
Important Disclosures
Real Estate investing is subject to some degree of risk. The value of an investment will fluctuate over time, and an investor may gain or lose money, or the entire investment. Past performance is no guarantee of future results.
Brookfield Oaktree Wealth Solutions LLC is a wholly owned subsidiary of Brookfield. Brookfield Oaktree Wealth Solutions LLC is registered as a broker-dealer with the U.S. Securities & Exchange Commission (SEC) and is a member of FINRA and the Securities Investor Protection Corporation (SIPC).
The information contained herein is for educational and informational purposes only and does not constitute, and should not be construed as, an offer to sell, or a solicitation of an offer to buy, any securities or related financial instruments. This material discusses broad market, industry or sector trends, or other general economic or market conditions, and it is being provided on a confidential basis.
It is not intended to provide an overview of the terms applicable to any products sponsored by Brookfield Corporation and its affiliates (together, “Brookfield”). Information and views are subject to change without notice. Some of the information provided herein has been prepared based on Brookfield’s internal research, and certain information is based on various assumptions made by Brookfield, any of which may prove to be incorrect. Brookfield may not have verified (and disclaims any obligation to verify) the accuracy or completeness of any information included herein, including information that has been provided by third parties, and you cannot rely on Brookfield as having verified any of the information. The information provided herein reflects Brookfield’s perspectives and beliefs as of the date of this material.
Opinions expressed herein are current opinions of Brookfield, including its subsidiaries and affiliates, and are subject to change without notice. Brookfield, including its subsidiaries and affiliates, assumes no responsibility to update such information or to notify clients of any changes. Any outlooks, forecasts or portfolio weightings presented herein are as of the date appearing on this material only and are also subject to change without notice. Past performance is not indicative of future performance, and the value of investments and the income derived from those investments can fluctuate.
Forward-Looking Statements
Information herein contains, includes or is based on forward-looking statements within the meaning of the federal securities laws, specifically Section 21E of the Securities Exchange Act of 1934, as amended, and Canadian securities laws. Forward-looking statements include all statements, other than statements of historical fact, that address future activities, events or developments, including, without limitation, business or investment strategy or measures to implement strategy, competitive strengths, goals, expansion and growth of our business, plans, prospects and references to our future success. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other similar words are intended to identify these forward-looking statements. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results or outcomes. Consequently, no forward-looking statement can be guaranteed. Our actual results or outcomes may vary materially. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
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