This marks a shift from the previous 24 months, when investors had largely been targeting commercial real estate’s lower-risk investments: core and core-plus opportunities. From 2022 onwards, core capital was drawn down as investors focused on more risk-sensitive strategies and benefited from the low-rate environment. But as risk and return expectations shift, investors have become increasingly demanding of higher returns, with risk-free rates rising, in order to compete with fixed income yields. Core capital will, in our view, have to be increasingly creative to compete in an asset class that now demands higher returns.