Rethinking Investment Strategies Amid Market Volatility

During a recent conversation with one of our longtime investors, a seasoned real estate developer who has navigated multiple market cycles, he shared a sentiment that’s becoming increasingly common: it’s getting harder to find real estate deals that truly make financial sense.

He’s not new to the game. This is someone who knows how to evaluate a property, manage a development, and turn a profit. But lately, the numbers just haven’t been adding up. Here’s what he’s been seeing:

• Interest rates remain high, driving up the cost of financing.
• Inflation continues to push up the price of building materials—everything from lumber to labor is more expensive.
• Buyer competition is intense, even for mediocre assets, which is driving prices beyond what’s reasonable.

In short, he’s not seeing the value in competing for overvalued assets with shrinking margins. So, like many savvy investors right now, he’s looking elsewhere for yield, and that “elsewhere” is private credit.

Why Worth Avenue Capital?

This particular investor is choosing to allocate more of his idle cash to Worth Avenue Capital’s private credit platform, and it comes down to three key things: strong returns, short durations, and solid security.

At WAC, we specialize in short-term bridge loans that are typically 12 months or less. These loans are well-collateralized and offer returns that consistently fall between 13% and 15% annually. That’s not hypothetical. Those are real returns being generated and distributed to our investors.

What this investor appreciates most is the steady cash flow and the clarity of the model. Unlike traditional real estate deals that might tie up capital for years, WAC loans are designed for liquidity. He knows when his capital will be returned, and he knows what kind of yield to expect.

A Smarter Use of Idle Cash

We also talked about alternatives. A lot of investors are sitting on cash right now, either because they’re waiting out the market or they’re unsure where to go next. But while that cash is sitting in T-bills or money market funds, it’s earning around 4% annually, and that’s before taxes.

When you compare that to double-digit returns in a secured private loan structure, it’s an easy decision for many. This isn’t about chasing yield blindly. It’s about putting capital to work in a smart, controlled way while traditional markets remain in flux.

The Bigger Trend

This one investor’s shift is part of a larger trend we’re seeing at WAC. More and more people, especially those with backgrounds in real estate, private equity, or family office investing, are turning to private credit as a meaningful part of their portfolio.

They want assets that:

• Produce consistent returns
• Are backed by real collateral
• Don’t come with the long-term commitment or volatility of traditional equity markets

At Worth Avenue Capital, that’s exactly what we provide.