Institutional Real Estate Americas
April 1, 2013: Vol. 25, Number 4Buy For $225.00 Add to Cart
An old song: The senior housing sector is supposed to go boom! But stubborn baby boomers are not wild about being institutionalized
Given the economic stress felt throughout the U.S. economy during the past half-decade, it has been a comparatively smooth ride for owners and operators of senior housing facilities. Rents, occupancies and operating incomes at senior housing communities have been on a steady upswing for three years. But hold that buggy whip, some sober observers caution. They are not necessarily convinced the prevailing exuberance is rational, given boomers’ diminished financial resources and predisposition to age in place.
Welcome to the neighborhood: Investors are diving into the single-family housing market, but it's unclear whether it can become a sustainable institutional asset class
Exactly how — or even if — the single-family housing market will develop into a longer-term institutional investment asset class is still not clear. But you cannot tell by the current transaction volumes and business building activity in the sector.
Northern exposure: Why commercial real estate in Canada? Why now?
Canada distinguished itself as one of only a handful of developed countries to experience a strong economic recovery from the depths of the 2008 financial crisis. Much of this resilience is due to Canada’s healthy and stable institutions. In particular, Canada’s banking sector remained well capitalized through the crisis, and, according to reports by the World Economic Forum, it has consistently ranked the soundest in the world for the past three years.
Bound by risk: Under what circumstances should risk premiums for Asia be reduced?
Given how Asian real estate markets have matured, does it still make sense for foreign investors to require sizable risk premiums to invest in the region? Investors have different needs in terms of returns, and different comfort levels with known and unknown risks in particular markets, so there will never be a one-size-fits-all answer. Having said that, investors ought to be reducing their risk premiums in any region where there is improvement on several fronts.
The Austerians: Intractable unemployment is fomenting another American Revolution
"Austerians" is what Paul Krugman, the economist and New York Times’ columnist, calls all of the political leaders and policymakers worldwide who promote the notion that we have to reduce budget deficits to revive economies. It’s nonsense! Austerity will do nothing but keep us mired in the economic never-never land for years. It is a policy that justifies and defines the dichotomy between the haves and the have-little or have-nots.
Capital Flows: Sales dominate activity
In third quarter 2012, U.S.-based investment managers focused on selling assets and new acquisitions were limited, making them net sellers for the three-month period. During the quarter, investment managers reported dispositions of $7.3 billion and acquisitions of $4.7 billion, according to Institutional Real Estate, Inc.’s Investment Manager Capital Flows Survey.
Vital signs: How the boom in healthcare spending can benefit retail centers
Health-related expenditures in the United States have increased from comprising 16 percent of personal consumption expenditures in 1991 to more than 20 percent by 2011, according to the Bureau of Economic Analysis. As baby boomers rapidly move into their “golden” years, this crowding out of traditional retail expenditures will only accelerate — the very expenditures shopping center tenants depend on.
Slow hand: The perils of fast information
Over the broad sweep of history, information has been integral to the real estate business, and that information was most often slow information. Only in recent years has fast information emerged. The implications of the rise of fast information for the property markets and all property market participants are profound, yet too little appreciated.
Changes: Twenty-five years later, a publishing milestone is reached
You may have noticed our new design, introduced last month. What you may not have realized is the personal significance of this transition from a newsletter to a magazine format.
In memoriam: Peter Lewis, the bard of institutional investing
Peter Lewis, a veteran of the institutional real estate business and a long-time Editorial Advisory Board member to this publication, died March 2. He was 61 years old. Lewis is survived by his wife Monica and two adult children, Jeremy, 29, and Mandy, 26.
Investors express preference for separate accounts in 2013
Institutional investors are indicating a growing appetite for going their separate ways — as in favoring separate accounts over commingled funds. Large tax-exempt investors are expecting to place as much as 60 percent of their 2013 real estate commitments in separate accounts.
Shares of healthcare REITs break out of the pack to start 2013
Healthcare REITs led the charge during the first two months of this year, hoping for a repeat of their stellar 2012 performance when they posted a total return of 20.4 percent.
TPG Capital, KKR take aim at new real estate funds
TPG Capital Management is planning its first real estate fund with a target of at least $1 billion, while KKR & Co. is preparing to market its first debt fund dedicated to real estate investments with an initial capital allotment of $500 million.
Deals catch fire in the Americas during fourth quarter
For all the rattle and hum about the Asian continent and its emerging real estate markets, the Americas are proving no slouch. Sales of significant commercial properties (those priced at $10 million or higher) totaled $267.4 billion during 2012, a 19 percent increase above the previous year. The good news is documented in the 2012 Global Capital Trends report from Real Capital Analytics (RCA).
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