Funds that let you cash out monthly while holding real estate are selling convenience that doesn’t exist. Apartments don’t trade like Apple stock. It can take six months to sell a building—or never at the price you want. Yet investors are told they can hit “redeem” as if their money sits in a money market fund. That works in good times, but the second rate rises, or any economic uncertainty hits, and redemptions surge, and the lie is exposed. $16B frozen in Canada. Between Centurion, Trez, and Romspen, billions in “safe” private funds are gated. This isn’t a one-off—it’s systemic. The fee treadmill doesn’t stop. Investors can’t get out, but they still pay management fees. Centurion’s fee cut from 1% to 0.9% is a band-aid, not a cure. Liquidity premium runs in reverse. These funds promised higher yields than public REITs because the assets were “illiquid.” Now the illiquidity isn’t a premium—it’s a trap. Carney was right. When the former Bank of England governor said these structures were “built on a lie,” he was early, not wrong. Don’t build your business plan on investor liquidity that depends on low rates and constant inflows. When the tide goes out, property cashflow doesn’t save you—it turns against you. Vacancy climbs, bad debt grows, concessions creep in, and operating costs rise. Suddenly, you’ve got less money to pay investors right when they need it the most. What’s left? Sell an asset, pile on debt, or raise dilutive equity. That’s the real definition of “liquidity” in private real estate in a recession. If you want daily liquidity, buy liquid securities. If you want private returns, accept you’re locked in. Anything in between is financial alchemy, and alchemy always breaks when stressed. https://lnkd.in/e24gQppQ