Invesco cuts core real estate fees 20% to ease redemptions

Private real estate redemptions now have a price. WealthManagement.com reports that Invesco is cutting management fees by 20% for investors in the Invesco Core Real Estate—USA fund. The firm is also arranging a tender offer that lets investors out at 95% of net asset value. The open-ended fund, known as ICRE, is working through a $2.2 billion redemption queue the firm calls elevated.

Investors who stay get the fee cut through the end of 2027, provided they have no active redemption request. New commitments of $10 million or more carry no fees for a year. Departing investors leave at a 5% discount to NAV; IDR Investment Management, an affiliate of an existing shareholder, is the buyer.

ICRE was built for institutional backers such as public pensions, with periodic exit windows. It has not allowed investors to take out all the money they requested, according to people familiar with the matter. Invesco and its senior leaders are adding as much as $150 million to the fund. Redemption payments have run at 5.3% of NAV annually since 2022. The historical average is 3.5%. Real estate values sit about 25% below their peak, JPMorgan Chase estimates. Office portfolios remain weighed down by debt and high rates. The AI-fueled data-center build-out has helped some property investors; many others still struggle with assets bought at high prices.

The fee cut and the $150 million commitment put Invesco in company with Blackstone, whose executives added $400 million to a private credit fund earlier this year to cover redemption requests. Managers appear willing to pay investors to wait, and to put their own capital behind that patience, rather than sell into a soft market. For an allocator, the tender offer sets the exit price at 95 cents on the dollar. The fee waiver measures what Invesco thinks patience is worth.