The amount of available capital, or dry powder, earmarked for U.S. real estate investments remains at record levels. As of early 2024, closed-end funds have $253 billion in dry powder, with $209 billion specifically allocated to equity investments. Although there’s been a slight decline since the 2022 peak, this figure represents a 27% increase over 2019 levels(wp3).
Source: preqin, Newmark Knight Frank
A significant portion of this capital is expected to flow into industrial real estate, largely due to shifting investment strategies. With funds targeting fewer retail and office assets, industrial real estate has become a focal point. When factoring in the average 55% loan-to-value ratio, the purchasing power of this dry powder could reach $465 billion, creating immense potential for growth within the sector. Funds have been allocating capital predominantly toward value-add and opportunistic strategies, which make up two-thirds of all available dry powder, further enhancing the appeal of industrial properties.
