Article A renewed opportunity set in US private real estate

Opening disclosure

This marketing communication is intended only for Professional Clients in Continental Europe (as defined in the important information), Dubai, Guernsey, Jersey, Ireland, Isle of Man and the UK; for Sophisticated or Professional Investors in Australia; for Institutional Investors in the United States; for Institutional Investors and/or Accredited Investors in Singapore; for Qualified Clients/Sophisticated Investors in Israel; for Professional Investors in Hong Kong; for Qualified Institutional Investors in Japan; for certain specific Qualified Institutions and/or Sophisticated Investors only in Taiwan; for Wholesale Investors (as defined in the Financial Markets Conduct Act) in New Zealand, for Qualified Professional Investors in the Republic of Korea; for certain specific sovereign wealth funds and/or Qualified Domestic Institutional Investors approved by local regulators only in the People’s Republic of China; for Qualified Institutional Investors and/or certain specific Institutional Investors in Thailand; for certain specific institutional investors in Brunei and Indonesia, for Qualified Buyers in the Philippines for informational purposes only; for certain specific institutional investors in Malaysia upon request. In Canada this document is for use by investors who are (i) Accredited Investors and (ii) Permitted Clients, as defined under National Instrument 45 106 and National Instrument 31 103, respectively. It is not intended for and should not be distributed to, or relied upon, by the public or retail investors. Please do not redistribute.

Investment risks

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Property and land can be illiquid and difficult to sell, so the fund may not be able to sell such investments when desired and at the intended price.  The value of property is generally a matter of an independent valuer’s opinion and may not be realised.

Why US real estate?

U.S. private real estate has long been a core strategic allocation for institutional investors, offering a distinct return profile relative to public equities and fixed income. Over long periods, it has delivered competitive total returns with volatility closer to that of U.S. bonds than stocks, resulting in attractive risk‑adjusted performance¹.

Historically, private real estate has combined durable income, strong long‑term returns, and meaningful diversification, supported by low correlations to traditional asset classes. This balance has generally translated into favorable outcomes across market cycles.

Reflecting these attributes, U.S. private real estate has ranked as either the highest‑ or second‑highest‑performing asset class relative to U.S. stocks, bonds, and Treasury yields across every rolling 10‑year period over the past 29 years - underscoring its established role as a foundational component of institutional portfolios².

At 1:00 [chart description]

Rolling 10-year average annual returns (%):

• US Private Real Estate:
  • Began around 9% for the 1997-2006 period.
  • Declined to approximately -1% around the 1999-2008 and 2000-2009 periods.
  • Increased steadily thereafter, exceeding 12% beginning with the 2008-2017 period.
  • Peaked near 16% for the 2012-2021 period.
  • Ended around 14% for the 2016-2025 period.
• US Stocks:
  • Started near 12% for the 1997-2006 period.
  • Declined to approximately 7% around the 2001-2010 period.
  • Recovered to roughly 8% to 10% through the late 2010s.
  • Peaked near 10% around the 2010-2019 period.
  • Declined and ended around 5% for the 2016-2025 period.
• US Bonds:
  • Remained relatively stable throughout the period.
  • Generally ranged between 3% and 6%.
  • Started near 5% and gradually declined over time.
  • Ended around 2% for the 2016-2025 period.
• 3-Month US Treasury Bills:
  • Began around 4% for the 1997-2006 period.
  • Declined steadily over time, reaching approximately 0% around the 2007-2016 and 2008-2017 periods.
  • Gradually increased in later periods.
  • Ended around 2% for the 2016-2025 period.
• Key takeaway:
  • US private real estate delivered the highest rolling 10-year average annual returns during most recent periods.
  • US bonds exhibited the most stable return pattern.
  • 3-month US Treasury bills generally produced the lowest returns across the periods shown.

1:17 Why now?

The potential opportunity to invest in U.S. real estate today is currently being driven by timing and pricing. After a multi‑year repricing, many real estate sectors are trading well below prior peak values and, in some cases, below replacement cost, potentially creating a rare chance to acquire high‑quality assets at possibly discounted entry points³.

While population growth is not new, its near‑term composition may be favorable. The U.S. is entering a period of accelerated aging, with the 65+ population projected to grow by roughly 30% over the next decade and approach one‑fifth of the total population by 2030⁴. This cohort is expanding materially faster than the working‑age population, creating a durable shift in housing and services demand. This demographic shift is already translating into rising demand for affordable suburban and exurban housing, senior living, outpatient medical facilities, and healthcare‑anchored retail - property types aligned with longevity, accessibility, and cost efficiency.

At the same time, household formation dynamics are converging across generations. Younger households face persistent affordability barriers to homeownership just as older cohorts downsize and transition to rental solutions. With median U.S. home prices having increased 44% since Q1 of 2020 and 134% since the post‑GFC low, many households are pushed towards rental solutions⁵. This may reinforce the demand for detached  housing and neighborhood‑serving real estate in suburban growth markets, where population inflows remain strong and new supply is more limited.

Another potential catalyst comes from policy‑driven investment incentives. While digitalization and data growth are long‑term secular trends, recent fiscal legislation has materially improved the near‑term economics of certain real estate sectors. The One Big Beautiful Bill Act (OBBBA) allows for accelerated expensing of qualified capital investments and domestic R&D, the potential for enhanced returns for data centers, advanced manufacturing, and logistics assets.

These factors define potentially compelling reasons to consider investing in US real estate.

Why Invesco?

Invesco is a $2T+ global investment manager with one of the world’s largest real estate platforms. Our differentiation lies not in scale alone, but in the breadth of strategies, capabilities, and capital solutions we offer clients.

We invest across the risk‑return spectrum, from core and core‑plus equity to higher‑performing strategies and real estate debt, providing access to a broad opportunity set and flexible capital deployment across market cycles. Our platform combines decades of experience, deep local market insight, and global research, integrated with active asset management to manage risk and adapt as conditions evolve.

Together, this combination positions Invesco to pursue resilient, risk‑adjusted results across changing real estate markets.

1.      Source: Invesco, based on analysis of the NCREIF Property Index (NPI). According to Invesco analysis based on NCREIF data, over long periods, including the past three decades, private U.S. real estate has delivered total returns comparable to equities while exhibiting return volatility materially closer to that of U.S. bonds than stocks, resulting in attractive long‑term risk‑adjusted performance.

2.      Source: Invesco. Rolling 10‑year return analysis based on NCREIF Property Index, compared with U.S. equities, bonds, and Treasury yields.

3.      Congressional Budget Office (CBO) — The Demographic Outlook: 2026 to 2056 (January 2026).

4.      U.S. Census Bureau — Demographic Turning Points for the United States: Population Projections for 2020 to 2060.

5.      National Association of Realtors and Moody’s Analytics as of August 2025

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Important information

This marketing communication is intended only for Professional Clients in Continental Europe (as defined below), Dubai, Guernsey, Jersey, Ireland, Isle of Man and the UK; for Sophisticated or Professional Investors in Australia; for Institutional Investors in the United States; for Institutional Investors and/or Accredited Investors in Singapore; for Qualified Clients/Sophisticated Investors in Israel; for Professional Investors in Hong Kong; for Qualified Institutional Investors in Japan; for certain specific Qualified Institutions and/or Sophisticated Investors only in Taiwan; for Wholesale Investors (as defined in the Financial Markets Conduct Act) in New Zealand, for Qualified Professional Investors in the Republic of Korea; for certain specific sovereign wealth funds and/or Qualified Domestic Institutional Investors approved by local regulators only in the People’s Republic of China; for Qualified Institutional Investors and/or certain specific Institutional Investors in Thailand; for certain specific institutional investors in Brunei and Indonesia, for Qualified Buyers in the Philippines for informational purposes only; for certain specific institutional investors in Malaysia upon request. In Canada this document is for use by investors who are (i) Accredited Investors and (ii) Permitted Clients, as defined under National Instrument 45 106 and National Instrument 31 103, respectively. It is not intended for and should not be distributed to, or relied upon, by the public or retail investors. Please do not redistribute.

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