The Crucible: How did global REIT managers stack up in COVID?

During Covid, global markets saw an unprecedented plunge into recession, followed by an equally unprecedented leap into recovery. In many ways, the Covid crisis crammed an entire market cycle into 24 months. This period is useful for evaluating investment managers, whom investors normally judge over multiple years. When we review REIT manager performance into and out of Covid, we find:

• Between Q4 2019 and Q3 2021, managers witnessed atypical performance across assets. They faced an acceleration of secular, multi-decade business trends into a single quarter.
• At first, several managers gained from pre-crisis bets, but several failed to navigate an upheaval in factor leadership and sustain outperformance throughout Covid.
• Ultimately, managers with an integrated market advantage and an ability to take active bets outperformed throughout the cycle. Today, CBRE looks forward to continued momentum in real estate, and the potential for future outperformance against its asset class.