While broad real estate markets across many geographic regions have experienced a period of softening due to shifting interest rates and macroeconomic cycles, the asset class continues to hold a unique position in a diversified portfolio. At Hoovest, we believe the key to navigating this landscape isn't by following the broad market averages, but by identifying specialized niches where "basic economics" drive resilient cash flow.

Our strategy is built on two pillars: direct investment in niche sectors where we have a proven track record, and strategic partnerships with third-party real estate private equity firms and specialist managers. This allows us to access institutional-grade opportunities that are often shielded from the volatility of the general market.

Affordable Housing: The Counter-Cyclical Hedge

In a thriving economy, affordable housing provides stable, necessary infrastructure. However, its true value as an investment often shines during periods of economic challenge.

Affordable housing acts as a natural recession hedge. When the broader economy slows and more households face financial pressure, the pool of individuals who qualify for and require affordable rental options actually increases. This dynamic creates a "floor" for demand; as conventional market-rate renters seek more cost-effective options, rental demand for affordable units remains robust. This persistent demand leads to high occupancy rates and stable, predictable yields when other sectors are struggling with vacancies.

Seniors Housing: The Demographic Runway

The "Silver Tsunami"—the global aging of the Baby Boomer generation—is a long-term trend that provides a demographic tailwind for decades.

It is important to acknowledge that this sector faced significant operational setbacks during the COVID-19 pandemic. However, those events also led to a more professionalized market where high-quality operators have emerged stronger. Today, with many regions facing a shortage of modern assisted-living and memory-care facilities, seniors housing offers an opportunity to capture yield driven by absolute necessity rather than discretionary spending.

Student Housing: Purpose-Built Stability

Expanding on our multi-manager approach, we also look to specialized Student Housing Real Estate Investment Trusts (REITs) and private funds. Student housing has proven remarkably resilient; even in economic downturns, university enrollment tends to remain steady or even increase as individuals seek to upskill. By investing in purpose-built student accommodations (PBSA) near major academic hubs, we tap into a "per-bed" rental model that often yields higher returns and lower vacancy rates than traditional multi-family apartments.

Strategic Partnerships with Third-Party Private Equity

We recognize that no single firm can be an expert in every local market. To provide our clients with truly global and diversified exposure, Hoovest actively selects and monitors third-party real estate private equity funds. This allows us to participate in specialized strategies—such as industrial logistics, life sciences facilities, or distressed debt—managed by teams with deep, local operational expertise. This "manager-of-managers" approach ensures that our clients’ capital is always deployed in its highest and best use.

Finding Value in Unique Niche Projects

Finally, our direct experience leads us to niche projects that require a "hands-on" approach that traditional REITs often overlook:

• Resort Land with Strategic Rights: We look for land assets in high-potential regions that possess unique advantages, such as pre-existing water rights or being in un-zoned areas that allow for creative, high-value development without typical bureaucratic friction.
• Community Master Plans: We are drawn to large-scale, "master-planned" communities. These projects combine residential townhomes with commercial hubs, agricultural components, and hospitality assets. By controlling the entire master plan, we ensure that each component of the community supports the value of the others, creating a self-sustaining micro-economy.

Resilience Over Speculation

The current "softening" of the global real estate market is a reminder that not all square footage is created equal. At Hoovest, we remain active in real estate because we prioritize cash flow resilience over simple price appreciation.

By focusing on necessity-based sectors like affordable, seniors, and student housing—and by leveraging the expertise of world-class third-party managers—we aim to provide our investors with real estate exposure that is a proactive engine for generating income across all seasons of the economic cycle.