Selin Bucak | CityWire
The struggles of one investor can be the opportunity for another to pick up a high-quality asset at a time when deals remain scarce.
Randy Anderson, partner at Apollo Global Management and co-CEO of US-based fund Apollo Realty Income Solutions (ARIS), expects to see options to invest the $409m of capital its non-traded real estate investment trust (Reit) raised over the past year.
‘We believe we could see very high-quality assets come to market where the borrower may have bought at the wrong time or could be undercapitalised, and we can step in to acquire these assets and manage them,’ he told Citywire.
He added that they will look to invest in markets and property types with strong sponsorship and defensive characteristics. Sectors they are eyeing include multi-family housing, industrial, cold storage and data centres.
Apollo launched ARIS at the end of 2022, with a flexible mandate to invest across real estate equity and debt, at a time when real estate markets had started struggling.
Rising interest rates meant that borrowing costs increased and the value of properties went down. In the US, prices dropped by 11% since the Federal Reserve started raising rates in March 2022, according to the IMF.
‘We were very strategic in starting the Reit at that time, given the evolving market dynamics in private real estate, which do not happen frequently,’ Anderson explained.
