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Research Reports

Find the latest industry reports including reports that have been authored by IREI or by many well-known industry firms.

Research Reports

Institutional Investment in Infrastructure in Emerging Markets and Developing Economies March 2014

Courtesy of Public-Private Infrastructure Advisory Facility (PPIAF) and The World Bank Group

This study discusses the role of institutional investors in financing infrastructure in emerging market and developing economies (EMDEs). It analyzes the present level of involvement as well as the future investment potential of new financing sources such as public and private pension funds, insurance companies, and sovereign wealth funds. Current investment volumes are still low, but interesting, practical examples can be found in a range of countries and projects. International and domestic investors apply a variety of investment approaches in developing countries, using different equity, debt and fund instruments.

This overview can yield some lessons for policy makers and investors. There are (more or less) favorable pre-conditions for successful private-investor involvement, and different models work in different situations, depending on the development stage and the institutional environment. Four types of "leadership models" are therefore described for international and/or domestic investors seeking to spearhead infrastructure investment in EMDEs.

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THINK GLOBAL: Finding the MAGIC 2014

Courtesy of TIAA Henderson Real Estate

Within our new organisation, a unified investment strategy has been formulated using top-down analysis to identify the geography and cycle timing of prospective property investments. Targeting countries is the first layer of investment strategy, as country-level factors are a primary driver of property performance. These factors include both long-horizon elements of economic and demographic structure that contribute to the attractiveness of real estate investing, as well as shorter-term dynamics of real estate cycles and their drivers that detemine risk-adjusted pricing. This report offers a description of our top-down process and its conclusions for 2014. Bottom-up analysis dealing with individual sector, sub-markets and specific properties draws from the experience and expertise of our real estate professionals across disciplines. This complements top-down analysis and it an integral component of executing strategy.

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PCCP Market Commentary: Condos, Condos Everywhere Third Quarter 2014

Courtesy of PCCP LLC

We're continuing our exploration of supply and demand this quarter, but this time we are taking a look at condominiums, which was the last one sector of real estate that had substantial new development and unsold inventory during the last cycle. Today, almost six years later, much of the inventory ha been absorbed - largely at lower prices - or converted to rental units.

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U.S. Research Quarterly June 2014

Courtesy of Cornerstone Real Estate Advisers LLC

The U.S. economy temporarily contracted in the first quarter, impacted by sever winter weather. Real GDP declined at an annualized rate of 1.0% (second estimate) in Q1 2014, dragged down by declines in private investment and net exports. On the positive side, consumption expanded to a 3% annualized rate and real GDP was up 2% on year-over-year basis. Second quarter economic release portray a resilient and strengthening economy, albeit one that still face challenges (housing and long-term unemployment), that we expect to grow at 3% or above the rest of the year. Job growth is picking up, household wealth is rising, and policy uncertainity has essentially vanished from the news headlines.

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The Impact of REITs on Asian Economies April 2014

Courtesy of APREA

Real estate investment trusts (REITs) are relatively young asset class in Asia. The earliest markets to embrace the asset class were Japan and Singapore, both of which saw their first REIT initial public offering (IPOs) just a little over a decade ago. Since then, REIT markets have emerged in Hong Kong, Malaysia, Thailand, Taiwan, and South Korea, with additional markets such as India and the Philippines introducing REIT legislation or considering doing so.

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PCCP Market Commentary: Basic Instinct Second Quarter 2014

Courtesy of PCCP LLC

This quarter we're focusing on basic rules of economics: specifically, supply and demand. It is commonly understood that the Global Financial Crisis was not a real estate driven recession powered by commercial oversupply, like the early 1990s recession. Rather, it was caused by residential real estate over-pricing, largely driven by over-heated financial markets.

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Investment Focus: Frozen on the Rates: Impact of Interest Rates on Capitalization Rates

Courtesy of Morgan Stanley Real Estate Investing

Growing up in Canada, hockey was consistently a big part of my life (and still is). With the winter Olympics coming, 2014 is a big year in the hockey realm as twelve nations will compete for a gold medal in Sochi, Russia. In hockey, there are many ingredients: stick, skates, pads, ice, net, but none more important than the puck. The puck is a frozen disc of vulcanized rubber that every player is chasing, passing, shooting, defending and anticipating its next location. In fact, in the 1990s, Fox Television devised a system which had internal electronics allowing television viewers to track the position of the puck with a blue glow on the screen. Its purpose was to aid viewers to better follow and understand the action of the game.

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Opportunistic Investing in Europe: The Case for Germany, Poland and the Czech Republic

Courtesy of Peakside Capital

Over the last 12 to 18 months, there has been a noticeable increase in interest from US investors for opportunistic real estate investment in Europe. At Peakside Capital, we attribute this change to both "pull" and "push" factors. The "pull" is the realization in the US that the worst of the Eurozone crisis is behind us and parts of Europe are actually doing quite well. The "push" is the realization that the opportunities arising from the financial crisis in the US are now largely exhausted and so investors are looking further afield, with Europe being the next target. In other words, US-based investors now view Europe more as an "opportunity" than a "risk". 

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PCCP Market Commentary: Is It 2007 All Over Again? First Quarter 2014

Courtesy of PCCP LLC

It's year end, time for the traditional look back at the accomplishments of the year just concluded, and for a look forward at the opportunities to come. The U.S. stock markets are at record highs, despite hints that the Federal Reserve is starting to back off on its quantitative easing strategy. The Wall Street Journal reports that in numerous markets, housing prices are past prior peaks (although the numbers are uneven). The U.S. Treasury is reflecting increased confidence in the economy, passing the 3.0% rate for the first time since 2011.

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Era of Execution

Courtesy of Center Square Investment Management

This white paper focuses on the potential of value-add strategies to generate attractive risk-adjusted returns in private real estate. Value-add strategies involve acquiring real estate at an attractive cost basis and then resolving the property’s deficiency, stabilizing the income stream, and increasing the overall value of the property for disposition. 

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PCCP Market Commentary Commercial Real Estate Markets: Then and Now Third Quarter 2013

The U.S. economy appears to have recovered from the financial crisis. Equity markets reached record highs during the second quarter, with the Dow reaching its peak on May 28th at 15,409, an 18% increase from the beginning of the year. Fears of a double-dip recession have subsided behind 2.2% real GDP growth in 2012 and 2.5% projected GDP growth in 20131. With the continued growth of the economy, the Fed indicated that they may begin scaling back their monthly securities buying program. Despite the recent pull back in the markets, most indices are still very much in the positive for the year and the underlying macro-economic statistics are very positive year to date.

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Global Construction Disputes: A Longer Resolution

Courtesy of EC Harris

The key finding of this year’s report into global construction disputes is that disputes are taking longer to resolve. Overall, they are now taking over a year to resolve, with the average length of time for a dispute to last in 2012 being 12.8 months, compared to 10.6 months in 2011. This continues the trends for longer disputes - in 2010 disputes were taking 9.1 months to resolve. Whilst dispute durations are getting longer, the value of disputes was broadly stable in 2012. The average value of global construction disputes in 2012 was US$31.7 million, down slightly from US$32.2 million in 2011.

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PCCP Market Commentary: Leverage is Back 2Q2013

Courtesy of PCCP LLC

The 2008 financial crisis may forever be associated with one word: leverage. Homeowners (no money down mortgages), investment banks (30 to 1 leverage) and governments ($1 trillion deficits) took on too much debt, and the resulting correction has been painful.

Now, it seems that leverage is returning to commercial real estate, presenting new opportunities and a new set of risks. Leverage has grown more complex, and before making an investment, investors need to consider how leverage will impact investments in different parts of the cycle. Skillful management of leverage will be critical for investors to achieve required returns and survive any potential market correction.

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PCCP Market Commentary "Haves" and "Have Nots": Anecdotes vs. Stats First Quarter 2013

Courtesy of PCCP LLC

As we enter 2013, we are more than four years into the Global Financial Crisis. As stated in prior commentaries, PCCP believes we are only 40% of the way through the real estate workout cycle. Our view is consistent with the most prominent recent academic literature, which argues that leverage-induced recessions run 7-9 years (This Time is Different by Reinhart and Rogoff). Anecdotally, it feels like strong financial institutions are starting to invest in earning assets, which in our world means making new loans on commercial real estate (“CRE”). Real estate was hit especially hard and the recovery has been a story of “haves” and “have nots” as we all know. The “haves” are the best customers, with strong balance sheets and trophy real estate, or anyone with a Class A apartment project. The “have nots” are everyone else. But what do the numbers show? We analyzed data on the CRE debt world as a whole and the three largest banks holding CRE debt to see how our anecdotal observations match up against the statistics. We conclude that although CRE lending is showing signs of life for the “haves,” there will still be plenty of opportunity to lend on and invest in the “have nots,” specifically institutional-quality, non-core asset recapitalizations.

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Global Property Investment April 2013

Courtesy of Aberdeen Asset Management PLC

Global or local?

Property has long been considered a mainstream asset class for institutional investors. However, for most there has been a strong home-bias, with high exposure to domestic markets. Increasingly, we believe investors are looking toward global property markets as a way to improve potential risk-adjusted returns and divof their property portfolio. The step from domestic to global property investment, however,  is not a trivial one and in some cases it may not be an appropriate solution. We believe the following three steps provide some insights into global property markets and also a framework for investors to understand better whether it might be a suitable approach for them.

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Global Listed Infrastructure March 2013

Courtesy of CBRE Clarion Securities

Investment in infrastructure is among the world’s leading growth drivers and is a strategic priority for countries worldwide. Listed infrastructure companies are playing a dominant role in the accelerating growth of the infrastructure asset class globally. More than $50 trillion is likely needed to fund global infrastructure projects in the coming years, essentially making infrastructure among the world’s largest growth industries.

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The Elements of Investing in Real Asset March 2013

Courtesy of Cohen and Steers

Defining the Objectives and Characteristics of a Real Assets Framework 
In our view, the design of a real assets investment strategy is not just about inflation protection; it’s also about delivering attractive long-term returns with less volatility than found in most individual real asset classes. When inflation is rising, the strategy’s return potential should rise as well. When inflation is easing, its diversified return profile should be less volatile than those of individual real asset classes. And finally, the strategy should offer diversification(1) benefits for portfolios of stocks and bonds. As we applied these objectives to the design of a real assets framework, we identified five central themes.

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The Case for Real Estate Securities March 2013

Courtesy of Cohen & Steers

Real estate securities combine the benefits of owning commercial real estate with the features of publicly traded stocks. This unique combination results in a set of investment characteristics that we believe make a compelling case for a long-term strategic allocation to the asset class.

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Capital Markets Lender Forum February 2013

Courtesy of CBRE Capital Markets

Commercial real estate lending markets finished 2012 on a high note, with a flurry of deals closing during the fourth quarter. According to CBRE's analysis of loan closings, total lending volume increased by 18% in Q4 2012 over year-earlier levels. In addition to strong growth in multifamily lending from the agencies (up 36% from 2011 levels), banks and CMBS lenders contributed disproportionately to the overall gains.

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Emerging Trends in Real Estate Europe 2013

Courtesy of Urban Land Institute 

Optimism has returned to Europe’s real estate industry. Sentiment among industry leaders about the prospects for their businesses is more positive than at any time since 2008, despite the uncertain macroeconomic outlook. Equity for investment in prime commercial real estate is expected to increase, but bank debt is predicted to contract further. Emerging Trends Europe’s respondents are adjusting to this “new normal.” Those with access to capital are focusing on opportunities in areas they know best. They recognize that traditional stock selection and micro asset management skills are crucial to generating returns. The environment offers very little certainty and definitely no quick wins. Europe’s real estate markets continue to be challenging, but all sectors offer new investment potential, too.

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Emerging Trends in Real Estate Asia Pacific 2013

Courtesy of Urban Land Institute 

Investor sentiment across many markets in Asia has grown increasingly uncertain toward the end of 2012, with concern over fading global economic prospects tempered by ongoing strength in asset pricing and persistently compressed yields. The lack of conviction has been highlighted by the divergent approaches of foreign and local investors to property pricing, with Asian buyers often willing to pay up for properties at rates foreigners find prohibitive.

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2013 M&A Outlook Survey: Executives Expect M&A Market to be Active in the Year Ahead

Courtesy of KPMG LLP

KPMG and Mergers & Acquisitions magazine conducted a survey of over 300 M&A professionals at U.S. corporations, PE firms, and investment funds immediately after the U.S. election to gain a better understanding of the current M&A market. This publication analyzes the findings of the survey and provides insights into the outlook for M&A in 2013.

For additional news and information, please access KMPG LLP's Web site on the Internet at http://www.us.kpmg.com

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The Family Office's Guide to Fund Manager Selection

Courtesy of Family Offices Group

This report is a guide to assist single and multi-family offices in identifying top fund managers.

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The Family Office Capital Base

Courtesy of Family Offices Group 

This report is a primer on raising capital from family offices. 

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Family Offices in Singapore

Courtesy of Family Offices Group

The Singapore Family Offices report is  a short report on what really makes Singapore such a unique location for family office and fund management activities. 

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September 2012: Will the Office Sector Fall Off of the Fiscal Cliff?

Courtesy of Cassidy Turley

The phrase “fiscal cliff” was coined by Ben Bernanke, Chairmen of the Federal Reserve, in describing the impact of budget sequestration and tax increases on the U.S. economy, effectively causing a new recession to occur. The Congressional Budget Offi ce (CBO) agrees. They estimate that the new policies will cause real GDP to contract by 0.3% in 2013. However, the CBO acknowledges the possibility of avoiding the cliff if policymakers adopt alternative solutions. In this paper, we review the various scenarios and evaluate the impact each scenario would likely have on the commercial real estate (CRE) markets.

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3Q 2012 Giliberto-Levy Commercial Mortgage Performance

Courtesy of IPD

IPD Announces 3Q, 2012 Results of the Giliberto-Levy Commercial Mortgage Performance Index.  The Index, which tracks private market loans held in investor portfolios, produced a 1.15% total return in 3Q, 2012.

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The Case for Opportunistic Real Estate Investment in Europe

Courtesy of J.P. Morgan Asset Management – Global Real Assets

The past few years have certainly been a testing time for all investors active in the European real estate market. Sovereigns have been on the brink of collapse, economies show little sign of anything remotely approaching a sustained recovery, and the banking system will remain fragile for some considerable time yet. This period of unprecedented volatility has, at times, challenged the very core of the European experiment. Twenty something crisis meetings have come and gone and each has done little to calm the nerves of fractious investors, much less engender any feeling of confidence.

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Real Estate Secondary Market Transaction Volume Reaches $2.6 Billion During 2012

Courtesty of Landmark Partners

The market for real estate secondary transactions has recorded a fourth straight year of record transaction volume, with $2.6 billion of activity during 2012, based on Landmark Partners’ annual global tally.  A tenured investor in the real estate secondary market, Landmark continues to aggregate this data through a variety of channels including the firm’s own transaction experience as well as discussions with other market participants.   

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Q3 2012 U.S. IPD U.S. Quarterly Property Index

Courtesy of IPD

U.S. investment returns exhibit consistent growth.  The IPD U.S. Quarterly Property Index, which includes tax-exempt and taxable domestic and foreign investors invested in U.S. private equity commercial real estate, produced a total return of 2.5% in 3Q 2012, consisting of 1.4% income and 1.2% appreciation.

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A Case for Global Listed Infrastructure

Courtesy of Cohen and Steers

The fundamental case for infrastructure is grounded in the return potential and inherent characteristics of the asset class—long-lived assets in businesses with high barriers to entry found in monopolistic industries, typically supported by the resilient demand for essential services. The investment opportunities are global, driven by decades of infrastructure neglect in developed economies and the need to build out large scale infrastructure networks in emerging markets. 

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CalPERS Infrastructure Investment Outreach Review: Laying the Groundwork for Collaboration

Courtesy of CalPERS 

On September 12, 2011, the Investment Committee of the California Public Employees' Retirement System ("CalPERS") Board of Administration ("Investment Committee") earmarked up to $800 million for investment in California infrastructure over a three-year time period. The primary goal of this initiative is to make investments in essential infrastructure assets that meet the risk-return objectives of CalPERS Infrastructure Program ("the Program"), while also potentially benefiting local economic development and essential community services across the state. The Investment Committee instructed staff to develop a plan for outreach to state and local governments to explore the role CalPERS and other pension systems can play in facilitating infrastructure investment in California ("the Outreach Effort").

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When safe isn't safe: Why secondary office/flex transactions present a compelling alternate to core real estate acquisitions

Courtesy of Macfarlan Capital Partners, L.P.

Recent quarters have shown measured improvement in the United States economy. The current situation, however, contains uncertainty and investors must proceed with what leading economists refer to as “tempered optimism.”1 Allowing this mindset to guide decisionmaking creates a “flight to quality,” leading investors to pursue expensive Class A assets and core assets (such as trophy office towers and multifamily complexes in gateway markets New York City, Boston, Washington D.C., San Francisco and Los Angeles) purchased on historically low cap rates. These premium priced trophy assets attract investors who are looking to allocate equity to perceived stable products, due to an appetite for current yield driven by the record low U.S Treasury bond rates.

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Realising The Asean Economic Community in 2015

Courtesy of Knight Frank LLP

With the ambitious target of implementing the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) by 2015, the opportunities for corporate occupiers and real estate investors across an enlarged single market of some 600 million people look promising. Nicholas Holt examines the background, the challenges and the possible impacts. Nearly five years on from the signing of the AEC blueprint in November 2007, the region is now only three years away from the target of fully implementing measures to create a single market with free movement of goods, services, foreign direct investment and skilled labour.

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Commercial Real Estate Survey

Courtesy of KPMG LLP

KPMG LLP, the audit, tax and advisory firm, surveyed top-level executives in the commercial real estate industry during the second quarter of 2012.  Participants were asked about business conditions in their sector, the most significant revenue growth areas, and factors that would impede or support recovery in real estate. These responses were compared to the findings of a similar survey conducted among commercial real estate executives in the second quarter of 2011. For additional news and information, please access KPMG LLP's Web site

 

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China Research September 4, 2012

Courtesy of Real Estate Foresight

This report on Chinese real estate markets is designed to serve as a reference chart book to help investors systematically review the key data and indicators illuminating the latest changes, trends and themes in the markets. The information is organized in a way that brings together macro- economic, capital markets and sector specific direct market perspectives 

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Asian Property Outlook & Strategy August 2012

Courtesy of Pacific Star

Global economic activity expanded at a measured pace in the first half of 2012. Leading indicators point to a continued deceleration for most major economies. The private sector recovery remains modest in many countries amidst weak sentiment. As the unresolved Eurozone debt crisis looms over the global economy, the path ahead is fraught with uncertainties and risks. However, not all is gloom and doom. While economic prospects for the U.S. and Europe remain muted, Asia will continue to stand out given resilient domestic demand and greater policy options.

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