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Don’t Let Volatility Be the End of Opportunity
Understand why real estate and credit markets surged on the heels of a year-end downturn.
When a Sell-off is Just Sentiment: Focus on Fundamentals
When emotions run high, markets may freefall. Yet, we believe that the recent risk-off market didn’t make sense in the face of solid real estate and credit fundamentals. Here’s what we saw to forecast the rebound.
Market Cues Can Forecast Opportunities
ECONOMIC GROWTH IS MODERATING, BUT POSITIVE
Despite a slower Q4, 2018 GDP matched 2015 for the top performance since 2008.1
COMMERCIAL PROPERTY PRICES CONTINUE TO CLIMB
This year-over-year increase puts prices 30 percent above 2007 levels.2
LOW DEFAULT RATES LIMIT CREDIT RISK IN SEARCH FOR YIELD
Default rates are forecast to sit at roughly half of their long-term averages in 2019.3
View Disclosure: 1Bureau of Economic Analysis. U.S. Department of Commerce. 3/19. 2NAREIT. Fundamentals for REITs and REal Estate Are Stronger than the Mixed Macro News. 3/14/19. 3J.P. Morgan. 2018 High-yield Annual Review. 12/20/18.
Observed Premiums to Private Market Values (%)
Green Street Advisors. Commercial Property Outlook March 7, 2019.
Assessing Expensive Public Markets
A suddenly dovish Fed and positive real estate cash flows are propping up values, especially in the public markets. Get our perspective on current valuations, as well as where to look for value late in the cycle.
Bloomberg. Barclays U.S. Aggregate Total Return Value Index. 12/08-12/18.
Planing for The End of the Cycle
Navigating the Fed’s U-turn on rates may mean avoiding an interest rate bet. Focus on low defaults in high yield and the increased risk embedded in passive fixed-income strategies. Read our views on building resiliency into your fixed income.
The information contained herein is intended to be used for educational purposes only and does not constitute an offer to sell or a solicitation to purchase securities. Such offers or solicitations can only be made by means of a prospectus. Prior to making any investment decision, you should read the applicable prospectus carefully and consider the risks, charges, expenses and other important information described therein. The value of your investments may decline, and you could lose some or all of your investment. The prospectus can be obtained by contacting your financial advisor or by visiting our website at www.ResourceAlts.com.
Resource has two interval funds that are distributed by ALPS Distributors, Inc. (ALPS Distributors, Inc. 1290 Broadway, Suite 1100, Denver, CO 80203). Resource Real Estate, LLC, Resource Alternative Advisor, LLC, their affiliates, and ALPS Distributors, Inc. are not affiliated.