KREST combines the benefits of real estate – inflation protection, growth potential, and hard asset backing – with the high income, low volatility, and defensive nature of traditional fixed income
Three Key Pillars
KREST has the ability to allocate amongst and within the three pillars as macro conditions change for the best potential risk-reward portfolio
STABILIZED REAL ESTATE1
Income-generating investments
Well-leased properties in high growth markets
Current focus on multi-family and industrial
PRIME SINGLE TENANT
Single Tenant Assets
Long-term contractual income with potential for appreciation of real estate value
Typically investment grade tenancy
Contractual rent escalators
REAL ESTATE DEBT
Real estate loans, preferred equity, or CMBS securities
Enhanced yield
Consistent and defensive cash flows
Structural seniority with potential to reduce drawdowns
(1) Stabilized income oriented real estate generally means that a property is well leased to tenants and does not require material capital improvements.
Learn More About KKR’s Real Estate Expertise And KREST’s Investment Strategy
Recent Trends
INDUSTRIAL
Continued acceleration of e-commerce penetration
RESIDENTIAL
Supply-demand imbalance
Household preferences favor renting
LONG LEASED OFFICE
Increased concerns about office density
Acceleration of migration trends
E-Commerce Penetration Accelerating Pre-COVID
Source: U.S. Census Bureau; Retail e-Commerce Sales Report. Data as of December 31, 2020.
Industrial Occupancy Has Outpaced Other Real Estate Sectors
(1) Represents retail and office.
Source: Greenstreet Advisors. Data as of December 31, 2020.
Demand For Housing Has Exceeded New Supply
Household formation has outpaced housing starts
Sources: RCG tabulation of Census Data, Zelman and Associates, Trend estimates for 2021E based on Zelman and Associates, US Census Bureau: Housing Vacancies and Homeownership Series TTLHHM156N as of January 2021; US Department of Housing & Urban Development: New Residential Construction Series HOUST as of January 2021; US Department of Housing & Urban Development: New Residential Construction Series PERMIT as of January 2021.
Homeownership Decline More Pronounced Across Households With Income <$150k
Source: Steven Ruggles, Sarah Flood, Ronald Goeken, Josiah Grover, Erin Meyer, Jose Pacas and Matthew Sobek. IPUMS USA: Version 10.0. Minneapolis, MN: IPUMS, 2020. Greater share of U.S. population is utilizing rental housing.
Migration To Southern And Western Areas Of The United States Is Not A New Phenomenon
Source: US Census Bureau. Data as at December 31, 2020.
Increased Office Space Per Employee To Address Social Distancing In The Workplace And More Creative Uses Of Space
Source: The RUTH Group. Data as at December 31, 2019.
