Not only does Vision divide the private and public markets, but it also believes that investors should do the same for property types and regions. There have been clear successes and failures in the real estate market during the pandemic, but Olin added that the general background is good.
“Despite the rise in interest rates, the spread between returns on investments in REITs and investment-grade bonds has been nearly double the long-term trends,” Olin said. “And when you can make little or no money with bonds, the thirst in the private real estate market is extraordinary.
“Blackstone, Brookfield, and retirement funds that are adding weight to real estate are funding $ 345 billion in dry powder, from 5% to 10% to 15% to 20%, according to Citi. Private equity funds that have been fully funded want to invest in real estate. This is a very good setting for the public markets. “
To make his point clear, Olin highlighted Vision’s involvement with Blackstone in an investment in Tricon, which is primarily focused on single-family homes, and Blackstone’s partnership with Goldman Sachs to buy Extended Stay America as an opportunity in the public markets.
One of the biggest winners from the COVID-19 disorder has been single-family homes. While the trend was already there, people are moving away from homes and public areas due to remote working. Now it’s possible – and more affordable – to move out of town and get a back yard, garage, and space to work or teach the kids.