How do Private equity funds buildor any sort of outsized returns vs the market in the 'core' segment of real estate? I understand from working in the sector that LPs are looking for cash/cash vs for 'core' strategy investments so: how do they return 6-8% annually while buying at a significantly lower cap rate?
Is the alpha built in by the ability to borrow at a lower rate then reits or other PERE firms?
is it in the financial engineering of debt during the acquisition?
do they build NOI margin y/y that outpaces inflation?