DEFINITION of 'Private Equity Real Estate'

 

Private Equity Real Estate is an investable asset class that consists of debt and equity investments in the property markets allowing multiple investors to pool their funds.  Private Equity Real Estate funds became prominent in the 1990s as an alternative way to capitalize commercial real estate to real estate syndications.

BREAKING DOWN 'Private Equity Real Estate'

Investing in Private Equity Real Estate traditionally requires a longer-term consideration, an active management strategy, and significant upfront capital commitment to a fund that seeks potential investment opportunities in the space. Little flexibility is offered to investors since the capital commitment typically requires several years.  However, given real estate’s popularity as an asset class, it provides high potential levels of income with strong price appreciation in the future.

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