Opportunistic Real Estate: A Guide to a Sophisticated Strategy

What Is Opportunistic Real Estate?

Opportunistic investing targets real estate situations that come with unique challenges or complexities that, when expertly managed, have the potential to generate outsized returns.

The strategy aims to acquire these assets at discounted valuations and generate strong returns through value-enhancing improvements in capital structures, property development and operational efficiencies.

While opportunistic real estate can be an effective strategy throughout all phases of the market cycle, opportunities to acquire stressed real estate tend to be most abundant during periods of market volatility and macroeconomic instability.

Current market conditions make a compelling case for opportunistic real estate investment. The capital markets volatility that ensued after the 2022-2023 rapid rise in interest rates placed stress on borrowers and depressed traditional bank lending.

With heightened volatility in real estate capital markets leading to distress for some real estate owners, the current environment could be the best time in years for opportunistic real estate investment.

Opportunistic real estate investing is about successfully capitalizing on opportunities to acquire mismanaged assets or businesses for value to generate significant returns. As such, careful manager selection is paramount—and it’s important to identify a manager that can help mitigate risks and drive better outcomes.