Passive Investing

Learn about cap rates, how they are used in commercial real estate, and how investors should consider them when evaluating passive real estate investments.

For LPs navigating an increasingly complex private real estate landscape, understanding when institutional backing genuinely adds value - and when it merely adds cost - is vital to optimizing your allocation strategy and maximizing risk-adjusted returns.

Experienced LPs can find themselves overwhelmed by financial models, market analyses, and sponsor presentations, yet struggle to make confident investment choices. Despite access to unprecedented amounts of data, many report increasing uncertainty and decision fatigue when evaluating potential opportunities.

Some of the biggest frauds and financial disasters have happened because investors skipped due diligence on a “friend of a friend.” It’s an easy trap to fall into, after all, if someone in your network vouches for an opportunity, why wouldn’t you trust them?