The “good news is bad news” trend continued in October. Real GDP increased significantly and payrolls were higher than anticipated, yet the S&P 500 recorded its third consecutive down month, the Equal Weighted S&P 500 fared even worse, and the Russell 2000 had its worst month since September 2022.

We maintain our existing tactical tilts: underweight U.S. equities, overweight short-duration fixed income/cash, and tilted towards value stocks in Large Cap U.S. and Developed non-U.S. The economic “bumpy road back to normal” highlights the challenges with establishing fair prices for assets in this environment where short-term interest rates are theoretically far from normal. There very likely could be some surprises still ahead of us.

Pathstone’s “Meet the Manager” interview series features some of the passionate and committed asset managers with whom we have developed strong relationships. Our goal is to share the depth and breadth of expertise and collaboration that goes into our investment process and to gather timely insights on the investment environment across asset classes.

This installment features Ben Brady, Partner and Portfolio Manager at Bain Capital Real Estate (BCRE). After a decade-plus at Harvard Management Company’s Real Estate Investment Group, Ben and team joined Bain Capital in 2018.

BCRE takes a research-driven approach in developing their investment strategies, focusing intently on identifying long-term themes that shape demand growth in the types, locations, and features of real estate assets in key sectors. The BCRE team has deep industry expertise that they use to drive operational improvements and create portfolios with consistent success across their targeted themes.

Notable real estate themes include infill industrial, life science, media/content space, horizontal apartments, medical office, residential, and self-storage. In this piece we include remarks around residential and life science.

Pathstone has worked with select Bain Capital strategies for a number of years. In this conversation, Pathstone’s Dave Freudenberg, Director of Private Markets, gets Ben’s perspectives on real estate markets and select investment opportunities.

Please note, this interview has been edited for length and clarity and includes excerpts from the complete conversation.