We’re deep in the hotel world here at Hospitality Investor so it's always good to get a reminder of what is going on elsewhere.
A new report from Eurazeo highlights just how much of an opportunity there is for investors in the wider operational real estate space.
What types of assets fall into this category and indeed how they are divided up is not universally agreed but essentially it is as INREV puts it:
investments in real estate assets where there is a strong correlation between returns to the asset owner and the underlying operational performance of the business occupying the property
Eurazeo has included Hotels (along with other forms of experience-driven entertainment) as well as: Specialist Residential (e.g. student housing, senior living); Private Healthcare (e.g. hospitals, clinics); an Storage (e.g. data centres, self-storage).
Eurazeo says:
These verticals offer a degree of operational complexity that many generalist managers cannot match, creating a competitive advantage for specialist investors with private-equity capabilities.
Before adding:
OpRE requires skills rarely found within traditional real estate investment. In addition to underwriting and asset management expertise, investors must understand revenue management, operational KPIs, regulatory nuances, digital platforms, and operator alignment.