Real
Over the past two years, annual transactional volume in the commercial real estate asset class has has exceeded $330 billion. Estimates suggest that, on average, transaction costs range between 500 bps ?800 bps, or in excess of $15 billion dollars annually. REAL seeks to make this market more risk and cost efficient.
By providing our clients with both appraisal-based and our proprietary transaction-based repeat sale indices, REAL intends to lower transaction costs to below 100bps.
REAL is well-positioned to provide enhanced market functionality, liquidity and savings. Our direct access to trading desks, REITS, insurance and pension funds, and asset advisors ensures our clients the most rapid and cost effective liquidity. As a result, our clients look for property derivatives to accomplish the following:
- Shorting index returns as a hedge against property value declines
- Buying index returns to gain synthetic exposure to the asset class
- Swapping different property types or geographic areas to capture mis-pricings in the real property market
- Creating relative value trades of REAL's indices vs. other real estate indices
- Generating portable alpha by shorting the index returns against long positions in the real property market
- Buying index returns as a cash management tool while investing a real property allocation
