During market downturns, institutional investors flee to higher-quality assets. Class A properties cost less to maintain and generate bigger profit margins, especially with smart debt structures, letting investors survive recessions and expand when growth returns.
One of the things, I mean, we kind of see this in the capital markets inflows, outflows. As we hit turbulence in a market, institutional investors, generally there's a flight to quality, right? Because quality is perceived as less risky. And so as we're kind of going into potentially turbulent market here, I would make a case that there's going to be opportunities in Class A. The returns may not be as high, But you're going to have lower maintenance costs. You're going to have much higher margins. And if you do it with smart debt, you can ride it out. And then, right, in a good growth market, you can ride and expand those margins.
