Institutional Real Estate Americas
May 1, 2013: Vol. 25, Number 5Buy For $225.00 Add to Cart
Golden Geese: Sovereign wealth funds are awash in money, and their penchant for real estate is growing
Though he was not speaking specifically of investment managers, the great novelist F. Scott Fitzgerald summed up the unique anguish of the pursuit of money when he wrote that the people who gathered at Jay Gatsby’s lavish parties were “agonizingly aware of the money in the vicinity and were convinced it was theirs for a few words in the right key.”
Debt side story: Real estate debt funds have swelled with capital and opportunity
Back in the years 2008 and 2009 — ancient history now — a significant amount of capital was raised to invest in distressed debt. It was the pessimist’s play. Real estate values were sinking fast during the Great Recession, and many shrewd investors figured banks would have to unload some of these problematic properties by paring off distressed loans at huge discounts.
No more manana: There are lucrative investment opportunities in overlooked Latin America nations
When it comes to real estate investing in Latin America, Brazil and Mexico garner all the attention — for good reason. As the two largest economies in Latin America with sizable investable real estate universes, their young and growing middle class populations are seen as strong drivers of real estate demand. And Brazil is one of the famous BRIC countries, no less.
Stronger than a BRIC: As an investment destination, Turkey has become a better proposition than the much-vaunted BRIC markets
Today, the phrase “emerging market” is almost synonymous with the acronym BRIC. Conceived by Goldman Sachs’s Jim O’Neill in his 2001 paper, titled Building Better Global Economic BRICs, the economies of Brazil, Russia, India and China have grown substantially during the past decade from the standpoints of GDP and investment. While their performance has validated O’Neill’s thesis, it is not necessarily given that these four countries offer the best emerging market risk-adjusted returns in today’s environment.
A risk worth taking: Adoption of a stronger approach to risk management will improve the performance of real estate
The global financial crisis had profound implications for real estate, with trillions of dollars being wiped off the asset class and serious questions being raised as to the credibility of real estate as a significant element of institutional portfolios. Since that time, most real estate markets have experienced a recovery and, unlike other crises such as the early 1990s or the 1970s, investors have continued to demand exposure to the asset class.
Issues of the day: Confab debates strategic planning, standardization, disclosure, risk and portfolio management, market opportunities
Within 24 hours of this writing, we will be opening up the first session of our Spring 2013 Editorial Advisory Board meeting, being held this week at the Biltmore in Santa Barbara, Calif. Joining us at the board meeting will be 23 investors, 11 consultants, and 36 investment managers.
Yen again, yet again: Japan
At the end of 1989, Japan’s bubble economy burst and its economic miracle came to an abrupt end. The Nikkei exchange fell from nearly 40,000 to around 12,000 today. Over the course of 20 years, what appeared to be unstoppable economic growth proved to be anything but.
Asian investor capital keeps flowing into U.S. properties
Gateway and other cities in the United States are seeing an influx of Asian capital, as overseas investors and developers have been acquiring commercial property quickly and often.
Signs of life in the commercial construction industry
When it comes to U.S. commercial real estate construction, it has been Stagnation Nation for years. Finally, we are seeing construction cranes springing back to life in North American gateway cities, and organizations that follow the industry are forecasting more to come.
Why would anyone want to invest in office?
What could be more imposing or inviting to the aspirational investor than a gleaming office tower? But don’t judge a building by its façade. Office has been the worst performing property type during the past 20 years, according to data from the National Council of Real Estate Investment Fiduciaries (NCREIF). Office has not even been among the top two since 2007.
Investors banking on growth for U.S. industrial properties
All signs point to a solid performance by the U.S. industrial property sector in 2013 and beyond as it continues to bounce back from the recession. The manufacturing sector has shown steady gains, and tenant demand for warehouse and distribution space is strengthening. CBRE reports that the year-end 2012 national industrial availability rate fell to 12.8 percent, reflecting a year-over-year improvement of 70 basis points.
Multifamily sector stabilizes as growth tapers
The multifamily sector rose from the ashes of the Great Recession as rental growth sprang up in 2011 and 2012, but researchers forecast 2013 will be the year the market starts to stabilize.
An infamous South American city rehabilitates its reputation
There was a time when Medellín, Colombia, seemed a city beyond redemption, forever associated with the notorious cocaine kingpin Pablo Escobar and the brutal drug cartel that took the city’s name as its own.