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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

The Economy

ECONOMIC GROWTH IS MODERATING, BUT POSITIVE

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Despite a slower Q4, 2018 GDP matched 2015 for the top performance since 2008.1

Real Estate

COMMERCIAL PROPERTY PRICES CONTINUE TO CLIMB

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This year-over-year increase puts prices 30 percent above 2007 levels.2

Credit

LOW DEFAULT RATES LIMIT CREDIT RISK IN SEARCH FOR YIELD

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Default rates are forecast to sit at roughly half of their long-term averages in 2019.3

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.

VIEW REAL ESTATE REPORT +

Credit Risk Embedded in Barclays Agg

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.

VIEW CREDIT REPORT +

Resource is the marketing name for Resource Real Estate, LLC, Resource Alternative Advisor, LLC, and their affiliates. Resource may distribute certain products through Resource Securities LLC, a wholly owned broker/dealer, Member FINRA/SIPC

 

The information contained herein 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. To obtain a prospectus containing this and other information, please call (866) 773-4120 or download the file from www.ResourceAlts.com. Read the prospectus carefully before you invest.

 

Resource has two interval funds that are distributed by ALPS Distributors, Inc. (ALPS Distributors, Inc. 1290 Broadway, Suite 1100, Denver, CO 80203). Resource Alternative Advisor, LLC, Resource Real Estate, LLC, their affiliates, and ALPS Distributors, Inc. are not affiliated.

 

Performance data quoted represents past performance. Past performance is no guarantee of future results and investment returns and principal value of the Fund will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted above. For performance information current to the most recent month-end, please call toll-free (866) 773-4120 or visit www.ResourceAlts.com.

 

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