The demand side for real estate has weakened during the current economic correction, but the supply side is under control, preventing the valuation collapse of the early 1990s. The private investment predecessor of Crimson Capital invested over $100 million since the early 1980s throughout changing markets. Such a foundation well positions Crimson Capital to continue to invest and develop income-producing properties with appreciation potential.

Real estate is a labor and time intensive investment class and is typically only a small portion of an investor’s total investment portfolio, thus it is not prudent to spend the time required to place private investments in real estate. Crimson Capital currently owns greater than 50% of the equity value of its existing 1,000,000 square foot portfolio and was developed as a self-interested real estate investor. This unique attribute offers investors the chance to co-invest in direct real estate alongside Crimson Capital’s own equity, perfectly aligning the incentive to maximize value for all investors in every transaction.

How to approach the real estate market right now? In this environment, core real estate purchased after the most recent pricing correction represents an income-generating vehicle, typically purchased below replacement cost that retains upside potential in the event of an economic recovery. Value Add investments are becoming more and more appealing as sellers and developers are being forced to liquidate quality assets at advantageous pricing. We believe that the economic recovery is not right around the corner, but that well-located assets, purchased at the right price over the next twelve to twenty-four months have the potential to provide outsized returns for investors.