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CBRE on seizing opportunities in times of crisis

Achal Gandhi, global indirect real estate strategies CIO, reflects on CBRE Global Investors' success focusing on the most resilient sectors to navigate the pandemic.

This article is sponsored by CBRE Global Investors

What were the key events for your firm last year?

Achal Gandhi

In 2020 we celebrated the 10-year milestone for our flagship global core-plus program, which provides our clients access to a diversified, high-quality portfolio of assets focused on our preferred investment themes and generating a core-plus-return profile. This program has delivered an outperforming track record against its target returns over the last decade.

We were also pleased to launch our special situations program, a higher-return-seeking program with the ability to be nimble and access opportunities at below-market value because of dislocation and illiquidity. Given the current market disruption, this strategy’s recapitalization and gap equity approach is well-positioned to take advantage of discounted entry opportunities. The strategy fits well with our predominantly core and core-plus existing product architecture and allows us to execute across the risk spectrum for our clients.

We also invested over $4 billion of capital for our indirect real estate clients. We were able to source and invest that capital in a disciplined manner focusing solely on logistics, life science and residential – and as such delivered resilient investment performance.

How has the operating environment been?

In some respects, 2020 was a year of two halves. From the start of the year to mid-2020 we had, by and large, paused our investment activity to take stock of pandemic conditions and ensure that our existing investments were robust, that we identified any risks early, that we reported those risks to our clients and that we mitigated them.

Once we were able to better assess how the pandemic was evolving and which real estate sectors were under threat and which were more resilient, we really accelerated our investment activity towards the second half of the year. The bulk of the capital invested across 2020 took place in this period. We were able to invest that capital because of our existing and established operating partner network, our broad global platform and team which enabled us to source opportunities and deploy capital effectively.

How did you overcome the challenges you faced?

The whole industry went from working in offices to working remotely, literally overnight. We were well prepared for this from a technology and infrastructure perspective, and many of our team members had experience working remotely as a result of travel and flexible arrangements. While it required a shift in mindset to work from home every day, it really was business as usual.

The other challenge was to ensure we continued to execute and monitor investments while avoiding any interruptions to our disciplined investment process. But with our strong platform, global team across 31 offices worldwide and our trusted operating partner relationships, we were able to manage this situation well.

Who or what is mainly responsible for your success?

Achieving the milestones listed above amid the wider context of a global pandemic and an almost exclusive virtual working environment is a true testament of the capabilities and dedication of our high-performing teams and the trust placed in us by our clients.

Additionally, the benefits our wider platform affords us from a research, intelligence, footprint and sourcing perspective really came to the fore in 2020 and were crucial to our success.