Capital investors are beginning to play ball again after months of waiting through the sudden uncertainty brought on by the pandemic. While strategies have shifted, investors are starting to look at and consider opportunities, according to Khalif Edwards of CityView, who has witnessed the shift in investor attitudes.
“During the first few months of the pandemic, investors were mostly playing defense,” Edwards, managing director of capital raising and investor relations at CityView, tells GlobeSt.com. “They were trying to get an understanding of the potential impact of COVID-19 on their respective portfolios, including what parts of their portfolio were most at risk and how that risk could be mitigated. Now, it appears as though investors are looking to play some offense and get their arms around what opportunities are available moving forward. I do think there is a bit of shift to non-core strategies, but investors are really trying to understand the risk involved and what the appropriate return is for that level of risk.”
Investors like CityView have also played an active role in getting investors comfortable with the new environment and building more transparency into the fundraising process. “We remain very focused on providing our clients with frequent updates as it pertains to collections, leasing and insights on the market, as things seem to change weekly, if not daily,” says Edwards. “Investors appreciate the transparency and constant communication regarding the investments they have with us. It is our fiduciary responsibility to be as proactive as possible and respond in a timely manner to any information requests that we receive.”
While the pandemic has certainly hit the economy, this cycle is much different than the 2008 financial crisis. “It feels a bit different this time around because of the challenges surrounding having in-person meetings with investors,” says Edwards. “After the Global Financial Crisis, you were still able to get on a plane and meet with prospective investors and develop relationships.”
Today, however, investors have been flexible in adapting to new norms, including virtual meetings and tours. “Investors are very thoughtful and thorough when underwriting a new relationship, which requires multiple in-person meetings, onsite due diligence visits and property tours,” says Edwards. “Today’s current environment really doesn’t allow for that. With that said, I do feel it is a bit more challenging with respect to fundraising today than it was during the Global Financial Crisis.”