Baron Funds, an investment management company, released its “Baron Real Estate Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund rose 7.07% (Institutional Shares) compared to a 2.39% return for the MSCI US REIT Index (the “REIT Index”) and a 4.73% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The firm is optimistic about the prospects for the stock market, public real estate securities, and the fund. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like CBRE Group, Inc. (NYSE:CBRE) in the first quarter 2023 investor letter. Headquartered in Dallas, Texas, CBRE Group, Inc. (NYSE:CBRE) is a commercial real estate service and investment company. On June 26, 2023, CBRE Group, Inc. (NYSE:CBRE) stock closed at $75.56 per share. One-month return of CBRE Group, Inc. (NYSE:CBRE) was 0.68%, and its shares gained 2.86% of their value over the last 52 weeks. CBRE Group, Inc. (NYSE:CBRE) has a market capitalization of $23.486 billion.
Baron Real Estate Fund made the following comment about CBRE Group, Inc. (NYSE:CBRE) in its first quarter 2023 investor letter:
“We are also encouraged by the findings of a recent analysis completed by CBRE Group, Inc. (NYSE:CBRE) which estimates the future debt refinancing shortfall for various commercial real estate categories.
In the last few years, a large portion of commercial real estate was financed with historically low interest rates, which contributed to a rise in commercial real estate property values. Now, following the Federal Reserve’s 2022/23 aggressive campaign to raise interest rates and lower inflation, portions of commercial real estate face refinancing headwinds in the form of higher borrowing costs and lower loan availability, in some cases due to lowered commercial real estate building values.
According to CBRE, the sharp rise in interest rates and more restrictive lending conditions may result in a debt-funding gap for certain real estate borrowers when refinancing debt. A debt-funding gap may occur when a borrower seeks to refinance real estate debt at a time when the expected value of a real estate property has declined and/or less debt is provided by the lender (lower loan-to-value). New loan proceeds may not be sufficient to repay the debt coming due…” (Click here to read the full text)
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CBRE Group, Inc. (NYSE:CBRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held CBRE Group, Inc. (NYSE:CBRE) at the end of first quarter 2023 which was 38 in the previous quarter.
We discussed CBRE Group, Inc. (NYSE:CBRE) in another article and shared Third Avenue Real Estate Value Fund’s views on the company. In addition, please check out our hedge fund investor letters Q1 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
