Insecurities

Managers considering mortgage-backed securities as a hedge or liquidity play may want to think again. Blackstone is the latest firm to move away from securitized real estate, as it plans to wind down its half-billion-dollar Real Estate Income Fund series. Although BREIF is a retail capital vehicle and makes up just a sliver of Blackstone’s $500 billion portfolio, its demise speaks to a growing disconnect between institutional managers and the CMBS markets. Mack Real Estate Credit Strategies wound down its own CMBS hedge fund years ago as the potential for profits waned. More recently, TPG’s mortgage REIT, TPG Real Estate Finance Trust, was forced to sell nearly all of its real estate securities to meet margin calls forced by covid-19 shutdowns.

Time to fly

Korean investors are returning to global real estate markets after a covid-19 hiatus, even if it means a two-week quarantine. Korea Investment Corporation and Korean Teachers’ Credit Union have embraced novel measures to get the ball rolling on new investments, including using video conferences to conduct due diligence. But we also understand some Korean groups have decided that travelling again, and quarantining on arrival, to physically inspect assets is now worth it.

Are you an investor who sees the value in traveling again? Do you know of one? Send a note to our Hong Kong reporter Christie Ou.

Senior slump

The pandemic has flipped the script on US senior housing. The sector had seen steady growth for more than a decade, a secular trend driven by an aging population that has drawn many an institutional investor and manager to retirement communities, assisted living and memory care properties. However, the country’s senior housing market saw occupancy drop nearly 3 percent last quarter (see Bloomberg’s coverage here), the first decline since at least 2005, as Americans are unwilling, or unable, to move their older loved ones into facilities that have been hotbeds for the virus.

Data snapshot