In the 2021 iteration of the PERE 100, the covid-19 pandemic’s impact on the private real estate industry was clear to see. The lowest year-on-year fundraising growth since the ranking’s inception paired with muted investment activity levels revealed a market that was adversely impacted.
This year’s iteration demonstrates a market again thriving. Our signature ranking of private real estate managers by equity raised for discretionary value-add or opportunistic strategies in the last five years shows how the industry has navigated its way through the pandemic-addled fog and has focused on its recovery. Indeed, 2022’s ranking is a story of a fundraising market bounceback, with capital raised totaling $637 billion, 24.7 percent more than recorded in the 2021 ranking.
Blackstone continues to be the sector’s heavyweight champion, despite a slower fundraising year. However, Brookfield Asset Management and Starwood Capital – second and third place, respectively – remained on its tail after fundraising hauls of $29.9 billion and $21.7 billion.
We break down the headlines from this year’s PERE 100, delving further into the bounceback of private equity real estate in 2022 and the rise of sector specialists and reawakened giants.
What makes this year’s PERE 100 stand out is the rise of the middle. While the leading cohort remain in the top spots, smaller and medium-sized firms with a focus on in-demand property types flew up the ranking. For example, New York-based Pretium Partners, a single-family rental specialist, was outside the top 100 in 2021, but this year reached number 15 thanks to the demand for rental homes in the region. Read more about how middle-market firms were in the driving seat.
MSCI Real Capital Analytics echoes the sentiment of a turnaround, as transaction volumes for income-producing real estate entered record-breaking trillion-dollar territory. The evident uptick in activity levels was reflected in the PERE 100 net investing $270 billion on real estate, a 69 percent yearly increase. These healthy transaction figures were also reflected in the selling activity, again showing year-on-year growth by significant margins.
In 2021’s ranking, we said the PERE 100’s growth and deployment activity had been nudged by the coronavirus pandemic, but not knocked off course. The strength of the market in this year’s PERE 100 shows how accurate that sentiment was. Not only is the private equity real estate market back on track, but it is also storming ahead in its recovery.