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Sidecars that invest alongside traditional private real estate funds are on the rise, but their terms vary greatly. This lack of uniformity is unhelpful and will not last.
Looking to compete with the top equity firms, smaller managers are finding greater leverage when negotiating with investors by offering co-investments
While most managers offer a 50% discount, better deals for investors can be had.
The lower-risk nature of real estate exposure means sellers are less likely to opportunistically bring $1bn-plus portfolios to market.
Private real estate’s investors are staffing up and changing their policies to become more adept at using sidecars.
Sidecars have become popular for investors looking to right-size their portfolio and for managers in need of capital. But there is little uniformity in how they are arranged.
Managers and investors alike are approaching sidecars more frequently, in different ways and for new reasons. This increase in popularity, though, has led to some uncertainty.
Stakes in real estate vehicles accounted for 7% of total deal volume last year, according to advisor Greenhill.
Metropolitan Real Estate’s head of global secondaries headlines a flurry of personnel moves at the Washington, DC firm
Metropolitan Real Estate’s previous vehicle in the strategy raised $550m.

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