"Investors have three choices: [to] lower [their] return expectations, sacrifice underwriting standards or be disciplined in seeking out solid opportunities in this late cycle with the potential to deliver on private equity risk and return objectives over the long term," the report stated.
The firm's analysts said opportunities may be found in small to midsize companies; Europe, China and, selectively, India; and businesses benefiting from technological disruption.
Global Real Estate
"Finding value requires looking beyond the averages," the report stated. "Regional markets are at varied stages of the economic cycle and monetary policy normalization. These differences, and a host of distinct dynamics across and within regions, styles and sectors, create pockets of opportunity that can help investors diversify and enhance real estate portfolio income and return."
Analysts said Asia-Pacific real estate may hold opportunities with economies in midcycle. They also recommended the use of REIT debt to address volatility.