Bull vs. Bear: Is Real Estate Positioned for a Recovery?

Bear:
The return outlook for real estate stinks.

Bull:
Just means today’s prices aren’t baking in any upside.

Bear:
The 10-year is at 4.5% and cap rates are 5%. Where’s the upside?

Bull:
Rent growth. New supply is stalling.

Bear:
Shouldn’t that be attracting buyers?

Bull:
There’s still plenty of dry powder on the sidelines.

Bear:
Most of it needs 15%+ returns. Selling core to value-add capital won’t help prices.

Bull:
Most open-end funds have taken their marks and are back in positive territory.

Bear:
But they’re still facing big redemption queues.

Bull:
Mostly isolated, and those queues are shrinking.

Bear:
But you can get equity-like returns in debt.

Bull:
Maybe, but you can’t have debt without equity.

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Are you the bull or the bear?