PERE’s Secondaries & Recapitalizations report explores the rising role of manager-led deals in solving liquidity challenges
As investors push for distributions and managers resist selling high-quality assets into a subdued transaction market, secondaries are taking on a larger role across private real estate. Investor-led deals, as well as continuation vehicles, recapitalizations and other manager-led solutions, provide liquidity, extend hold periods and help preserve ownership of assets still positioned for future growth.
INSIDE THE REPORT
Secondaries are now a sophisticated capital formation tool
Investors are using secondaries to unlock liquidity, retain high-conviction assets and reposition platforms for growth.
Private real estate rides the recap wave
As refinancing pressures mount and exits remain elusive, investors are turning to recapitalizations to unlock liquidity and extend hold periods in a challenging market, writes Giovanni Legorano.
A rising tide for real estate secondaries
As managers seek liquidity without relinquishing prized assets, secondaries are becoming a permanent channel for capital flow.
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As debt maturities mount and fundraising slows, the real estate secondaries market is stepping up to provide critical liquidity. Manager-led transactions surged last year, fueled by the growing adoption of continuation funds – now a go-to strategy for extending asset hold periods and unlocking capital. Meanwhile, recapitalizations are proving essential for preserving value in a volatile market and secondaries investors are capitalizing on market dislocation, targeting high-demand sectors like logistics and data centers.
Secondaries surge as private real estate investors seek solutions
Three major themes emerge in real estate secondaries as private equity investors and fund managers look for liquidity.
Secondaries provides inroads to in-demand sectors
As high interest rates, depressed values and fluctuating markets continue to squeeze investors, real estate secondaries is flourishing.
StepStone Group on finding opportunities in market turmoil
Illiquid markets and overleveraged assets have opened a slew of GP-led secondaries deals, says Jeff Giller of StepStone.
Continuation funds keep evolving in private real estate
Beyond providing liquidity, continuation funds are becoming a key tool to extend ownership duration, enhance platform value and expand portfolios.
CBRE IM: Secondaries is seeing upward trajectory
CBRE IM’s Kilian Toms and Chris Dickson discuss how considered solutions have created a bull market in real estate secondaries.
What makes real estate continuation vehicles different?
Stephenson Harwood partners Sarah de Ste Croix and Gabriel Boghossian outline the main ways continuation funds in the real estate sector differ from their private equity cousins in the secondaries market.
Recapitalizations seen driving 2025 transaction activity
Lenders and borrowers need to come to terms with more than $2trn of near-term maturities, according to attendees at the CRE Finance Council conference in January.
Real estate secondaries fundraising dropped in 2024
PERE data shows that investors and managers continue to target the strategy, especially in North America.
As investors seek liquidity and managers look to increase value, continuation funds and recapitalizations are gaining popularity. And while 2023 saw a dip in deal activity, this appears to be a blip. Real estate secondaries should see continued growth, driven by increased demand for capital and attractive discounts, among other trends outlined in this report.
The last year has seen a sea change, with investor-led secondaries coming back into vogue as economic conditions have shifted. 2022 set a record for real estate secondaries transaction volume at $12.4 billion, but lost in that number is a slowdown for GP-leds which has continued into this year. While 2023 is shaping up to be a very different year to the one that went before, the LP-led revival suggests it will still be an active one.
No longer the exclusive domain of private equity specialists, real estate secondaries are a hive of activity right now. With Blackstone’s €21 billion recapitalization of Mileway billed as the largest private real estate deal of all time, and total secondaries transaction volumes surging, it is increasingly clear that secondaries and GP-led recaps – with their myriad benefits for both managers and investors – have become a strategic play in the private real estate market.
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