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Institutional Real Estate Americas

April 2011: Vol. 23 No. 4

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  • Love Thy Neighbor: The United States and Canada Share a Common Border, but Investors Will Find Differences on Either Side

    Institutional real estate investors in Canada and the United States are looking to their neighbors for cross-border property investment opportunities. Differences between the two markets can create different sets of opportunities. While Canadian investors may be attracted by opportunities created by distress in the U.S. property markets, U.S. investors will find a stronger economic recovery to their north.

     

  • The Art of Underwriting: Making Money "on the Buy" Still Rings True

    Over the past 10 years, institutional investors have experienced the best of times and the worst of times. Rebounding returns in the early to mid-2000s produced a rush of liquidity the likes of which the American commercial real estate markets had never experienced. Unfortunately, this rush of capital led, in part, to the meltdown of 2008 and 2009. The concept of “this time it’s different” turned into “real estate is still cyclical, and it will always have peaks and valleys.”

  • Investment Manager Co-investment: Does Co-investment Really Help to Align the Interests of Investors and a Manager?

    One widely held belief of institutional investors is that co-investment from a manager serves to align the interests of the manager and the investor. This article presents some challenges to this belief.

    While requiring manager co-investment in institutional real estate ventures may sometimes serve to align manager and investor interests, there are cases where it has negligible impact as well as cases in which its impact is counterproductive. From an institutional investor’s perspective, the challenge is to distinguish the cases where co-investment is a benefit from those where it is merely “alignment-candy” — or worse. It also means that LPs need to examine co-investment on a case-by-case basis and should not rely on simple quantitative or qualitative formulations such as “X percent of capital” or “meaningful co-investment.”


  • Cyber War? Integrated Systems Increase Efficiency

    A few weeks ago, I received a book from a person who, like the character Voldemort from the Harry Potter series, must not be named. The book was Cyber Wars, and it was written by Richard Clarke, former White House National Coordinator for Security, Infrastructure Protection and Counter Terrorism, with help from Robert Knake, an international affairs fellow for the Council on Foreign Relations.

  • Shop Talk: A Conversation with Brian Burry

    Employing a conservative, hands-on approach, the City of Fresno (Calif.) Fire and Police Retirement System is one of the few public funds that are actually overfunded. Larry Gray, editor of The Institutional Real Estate Letter – North America, recently discussed the pension plan’s strategies and investment philosophy with longtime police officer and trustee Brian Burry.