PIMCO’s real estate platform is one of the largest and most diversified in the world, with $186.9B (1) in assets as of 30 June 2024. Drawing upon a vast market presence, proprietary investment processes and deep asset level expertise, we aim to deliver differentiated insights and a broad set of solutions across the real estate platform investment spectrum.
PIMCO real estate platform by the numbers (1)
$186.9B real estate AUM including:
- $77.7B private equity
- $40B private debt
- $67.3B public debt
- $1.9B public equity
140+ acquisition and origination investment professionals
130+ asset management professionals
30 global offices in 19 countries with real estate experts on the ground
(1) All data as of 30 June 2024. All statistics represent the combined PIMCO and PIMCO Prime Real Estate businesses. Total AUM is $186.9B including $95B in estimated gross assets managed by PIMCO Prime Real Estate. PIMCO Prime Real Estate is a PIMCO company and includes PIMCO Prime Real Estate GmbH, PIMCO Prime Real Estate LLC, and their subsidiaries and affiliates. PIMCO Prime Real Estate LLC is a wholly-owned subsidiary of Pacific Investment Management Company LLC, and PIMCO Prime Real Estate GmbH and its affiliates are wholly-owned by PIMCO Europe GmbH. PIMCO Prime Real Estate LLC investment professionals provide investment management and other services as dual personnel through Pacific Investment Management Company LLC. PIMCO Prime Real Estate GmbH operates separately from PIMCO. PIMCO Prime Real Estate is a trademark of PIMCO LLC and PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world. Professionals dedicated to the PIMCO real estate platform globally are 500+ including 470+ employees of PIMCO Prime Real Estate which includes both PIMCO Prime Real Estate GmbH, PIMCO Prime Real Estate LLC, and their subsidiaries and affiliates. PIMCO offices worldwide amount to 23 while PIMCO Prime has 16, however often the locations for these are the same and therefore the total offices for both is 30. ©2024, PIMCO.
Sector forecasts (as of July 2024)
INDUSTRIAL: We anticipate that deglobalization and e-commerce will continue to drive sustained long-term growth in warehouses and logistics. Though geopolitics will influence demand, logistics facilities linked to digitalization trends, such as e-commerce, appear to have a more reliable demand trajectory. In Europe, demand is slowing but rents continue to increase, maintaining logistics as an attractive sector for investors. In Asia-Pacific, online sales are projected to grow from 20% in 2021 to nearly 40% by 2026[1], with deglobalization driving nearshoring trends. Vietnam and India will benefit as production shifts from China, while Japan and South Korea will gain from reshoring. In the U.S., industrial demand remains positive but net absorption has slowed over the last six months, with new deliveries peaking and higher availability expected in some markets.
(1) Footnote: Source: Green Street and CBRE as of April 2024
OFFICE: The global office market outlook remains challenging, with limited demand and price discovery ongoing. Regional outlooks vary. In Europe, demand for green, high-quality buildings in prime areas is relatively healthy. Importantly, energy regulations will likely dramatically reduce existing supply, as many office buildings will struggle to meet increasingly stringent rating requirements. In Asia-Pacific, office demand in central business districts remains near 2021 levels due to smaller apartments, shorter commutes, and a strong culture to work in the office. In the U.S., corporate cost-cutting and a stronger work-from-home trend have suppressed office demand despite job growth, with prices and rents outside class A+ buildings expected to continue to fall as private capital remains cautious and headline cap rates continue to expand.
RESIDENTIAL: The global outlook for apartment buildings is generally positive amid strong structural demand. In Europe, rents are rising steadily, driven by limited supply, high development costs, and stricter environmental regulations, alongside accelerating household formation and migration to metropolitan areas. In Asia-Pacific, prices and rents are firming amid moderate undersupply, with soaring home prices and urban migration by younger individuals driving demand. Demographic shifts, such as delayed family formation and single-person households, are reinforcing longer rental periods, while demand for co-living spaces has grown fueled by community living and access to amenities. In the U.S., record new supply has led to rising vacancies and, couple with widening cap rates, it has resulted in dropping market values. Despite strong long-term tenant demand fundamentals, these short-term pressures suggest more distress in the near term for the U.S. multifamily sector. The market is expected to stabilize by 2026.
DATA CENTRES:
Demand for AI and cloud services has ignited a global scramble for data center capacity. In Q1 2024, leasing volumes surpassed 1,800 megawatts, a sevenfold increase from three years ago[2]. Growth continues as tenants contract entire campuses, fueled by governments’ quest for digital sovereignty. Conversely, limited power supplies are becoming a growing constraint on data center development globally. Data centers will play a pivotal role in investor portfolios in the coming years. They are critical infrastructure, offering investors a way to capitalize on AI growth as suppliers to AI platforms without having to bet on the ultimate winners in AI technology.
(2) Footnote: datacenterHawk as of 31 March 2024
Investment principles & strategy
The PIMCO real estate platform offers strategies across public and private markets and in both equity and debt (all data as of end June 2024):
- Opportunistic real estate: PIMCO’s Opportunistic global real estate investments span real estate equity and distressed debt. Investments include direct equity stakes in real estate assets, companies and distressed loans.
- Core and Core+ real estate: part of the PIMCO real estate platform is one of the world’s largest Core/Core+(3) real estate portfolios offering deep expertise across global Core and Core+ investing and asset management with a focus on high-quality assets in primary locations.
- Real estate credit: strategies seeking to capitalize on opportunities across the real estate lending markets for the entire risk spectrum. PIMCO invests in senior loans, mezzanine loans, participating debt, B-notes, loan portfolio term financing, bridge loans, construction loans, structured, sub- and non-performing loans and distressed debt.
- Public real estate: as part of broader mandates, PIMCO manages c.$70B in public real estate assets. Investments include CMBS, CRE CDOs, secured and unsecured debt and REIT preferred/common equity.
(3) Footnote: Based on the PERE GI 100 ranking from 2024.
COMPLIANCE STATEMENT
This material is provided for informational purposes only and does not constitute an offer to sell or solicitation of an offer to buy interests in any PIMCO trading strategy or investment. The investment strategies discussed are speculative and involve a high degree of risk, including loss of some or all capital. Statements on financial market trends are based on current market conditions, which will fluctuate. The views expressed are those of PIMCO and are subject to change without notice. There is no guarantee that these views are correct or that these trends will continue. PIMCO has no obligation to update the information contained herein. Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660 | 800.387.4626. PIMCO is a trademark of Allianz Asset Management of America LLC in the United States and throughout the world. ©2024, PIMCO.
