Nuveen, one of the world’s largest real estate investors, breaks down the fundamentals driving opportunity amid a recovering global market
SOMETIMES, the true value of a deal lies in knowing when to walk away.
In 2021, a Nuveen strategy set its sights on acquiring an industrial facility in Salt Lake City used for manufacturing hot tubs and pools. But after conducting extensive due diligence, it did not proceed with the transaction when the price proved too steep.
Nuveen bought the same property earlier this year at an 18 per cent discount to the 2021 asking price, reflecting the opportunities in the US industrial real estate sector where many assets are priced below peak values even though rents held relatively steady during the same period.
“As a buyer today, we are seeing really strong opportunities in high quality assets with strong fundamentals that are trading well below peak pricing,” said Gracie Coburn, portfolio manager for one of Nuveen’s real estate strategies.
Nuveen is a top five investor in global real estate¹ with assets of US$141 billion (S$182 billion) spread across 30 cities in North America, Europe and the Asia Pacific.
Besides industrial properties, Nuveen is also bullish about healthcare real estate such as medical offices near hospitals, Coburn added.
Real estate valuations fell in the aftermath of the Covid-19 pandemic as the US Federal Reserve hiked rates from March 2022 to July 2023 to fight inflation.
The interest rate environment has since become more benign. While the Fed has kept its benchmark interest rate steady so far this year, other major central banks such as the European Central Bank and the Bank of England have cut rates several times.
Central banks’ interest rate cuts have helped lift stock markets.
Start of an upturn
According to Coburn, with stocks trading near their all-time highs, the real estate market looks set to benefit from fresh inflows of funds as investors rebalance their portfolios away from equities.
She added that the upturn in real estate could stretch for as long as 10 to 15 years in line with previous property market cycles.
“In the last four quarters, we’ve seen total returns from real estate become positive. This is very important because real estate investors want to see proof that we are past the bottom before they get the confidence to reinvest,” she said.
Total returns refer to gains from rising valuations as well as income from rents.
Last mile connections, uncorrelated returns
For industrial properties, Coburn highlights a preference for smaller facilities under 300,000 sq ft near the city centre as they often provide the “last mile” connection to end users. Such facilities are also hard to replace because of the limited land available for new developments.
The vacancy rate for US industrial properties is also below the historical average, Coburn added.
As for healthcare properties, Nuveen described it as an attractive niche sector that will benefit from higher rents and valuations as the US population ages.
“As people get older, they need healthcare more frequently. The demand is growing, and it is neither correlated to the economy nor to tariffs,” Coburn said.
“Additionally, we believe the ongoing secular shift in patient visits from hospitals to outpatient care in recent decades will continue to benefit medical office buildings and ambulatory surgical centres.”
Nuveen has a competitive advantage in medical properties thanks to its dedicated healthcare team that can source acquisition opportunities at attractive prices and manage the assets once they have been purchased.
Think global, not local
Chris Lau, Nuveen’s head of private wealth for Asia ex-Japan, said that while Asian investors have long favoured real estate investments, their holdings tend to reflect a strong home bias.
By working with global players such as Nuveen, investors gain exposure to developed markets and different sectors across the world.
“At Nuveen, there is deep sector expertise globally down into the geographies into which we invest,” he said.
One of Nuveen’s flagship investment strategies in real estate involves identifying the top 2 per cent of global cities based on different criteria, such as population, data availability, property rights as well as economic and political stability.
The company also takes into consideration megatrends such as the ageing population in developed economies, urbanisation, rising inequality and the transition to a low carbon economy before deciding where and when to invest.
Wary about data centres
From a core real estate perspective, one area where Nuveen is cautious is towards data centres. While the company has such assets in some of its portfolios, Coburn warned “the optimism from data centre investors today can lead to some mispricing”.
“It’s hard to predict the evolution in technological demand and subsequent power needs over the next 20 years. Some data centres will not meet the demand of future tenants, rendering them obsolete at the end of their leases,” she said.
She added that while the advent of generative artificial intelligence has sharply increased demand for data centres over the past two years, rents had fallen in the previous 10 years.
This decline was due to operators’ ability to meet rising data demand through efficiency gains rather than by renting more data centres.
In a world of rising uncertainty due to trade wars and other conflicts, real estate investments stand out because of their potential to deliver regular income in addition to long-term capital appreciation.
Lau said: “Looking more broadly across real estate alternatives, we see stronger core real estate opportunities across sectors including healthcare, grocery-anchored retail and industrial.”
Global presence with sector expertise
Founded in 1898, Nuveen manages over US$1.3 trillion² (S$1.6 trillion) in public and private assets for clients worldwide.
A top five investor in global real estate¹, Nuveen’s investment approach combines the identification of tactical opportunities with a strong alignment to global megatrends, such as the growth of e-commerce.
Nuveen is a wholly owned subsidiary of TIAA, formerly known as the Teachers Insurance and Annuity Association of America.
One of the world’s largest institutional investors³, TIAA was originally established as a non-profit organisation by Andrew Carnegie and his Carnegie Foundation for the Advancement of Teaching to provide retirement income for teachers.
Learn more about Nuveen’s global cities strategy.
Footnote:
¹Pensions & Investment Real Estate Managers Special Report, October 2024.
²Assets under management as of June 30, 2025.
³One of the largest institutional investors based on Pensions & Investments, June 16, 2025.
Disclaimer:
Investing involves risk, including the loss of principal. Past performance does not guarantee future results. Real estate investments are subject to various risks associated with ownership of real estate-related assets, including fluctuations in property values, higher expenses or lower income than expected, potential environmental problems and liability, and risks related to leasing of properties.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy, sell or hold a security or an investment strategy, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Financial professionals should independently evaluate the risks associated with products or services and exercise independent judgment with respect to their clients.
Nuveen, LLC provides investment solutions through its investment specialists.
