JPM's core recipe:
'Value-add returns with core risk'
'Generational entry point'
JP Morgan's Strategic Property Fund (one of the oldest and largest core funds in the ODCE index) is pitching clients on the following return outlook:
-- Going-in income yield = 4.6%
-- Income growth = 5.5%
-- CapEx burn = 1.5%
-- Favorable leverage = 1.6%
-- Total returns = 10%+
The Fund has made enormous progress with its redemption queue, generating $4-5B of liquidity (primarily through sales), $3-4B of redemption requests rescinded last year, and is gearing up to make new bets in alternative real estate sectors.
But at 4.6% going-in cap rate, betting on 300 bps of net cash flow growth.
Buying it?
PS -- stay tuned for JPM's entire pitch deck.