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Institutional Real Estate Americas

September 1, 2014: Vol. 26, Number 8

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  • After the crash: The CMBS market's comeback is supported by positive metrics and more cautious lending standards, yet red flags still wave

    Like the right amount of oil, commercial mortgage–backed securities lubricate the commercial real estate engine, helping capital push back and forth by allowing lenders to extend credit on assets that traditional whole loan lenders, such as life insurance companies and pension funds, will not. Without it, class B and C assets and assets in secondary markets would all struggle to get a decent loan.

     

  • SWFs catch the fever: Their coffers bulging with trillions of dollars, sovereign wealth funds are boosting their real estate commitments across the Western Hemisphere

    More than two-thirds of the world’s sovereign wealth funds have increased investments in real estate during the past 12 months as they shift from volatile equities and low-yielding bonds to alternatives that offer higher returns. With a technically unlimited time horizon on their investment commitments and willingness to accept lower yields, the implications for other real estate investors could be significant.

  • Future tense: What is on the minds of the next generation of industry leaders?

    Several years ago, executive search executive Tony LoPinto published a survey of senior executives titled Human Capitalon behalf of PREA, NCREIF, NAREIM and NAREIT. According to the survey results, very few of the real estate firms responding were devoting much in the way of resources toward training and leadership development of their young up-and-comers. Yet the vast majority of the executives responding to the survey admitted that the number one priority for most of those firms was developing their human capital resources.


  • Amstar, MetLife make push into industrial sector

    Amstar has U.S. value-add separate account funds. MetLife Real Estate Investors has a fat general fund. They have both committed to spending a combined $200 million of those funds trying to capitalize on the hot U.S. industrial sector.

  • Paladin expands its southern exposure

    Paladin Realty Partners’ taste for Latin American housing shows no signs of abating. The Southern California–based investment house has already committed more than $3 billion to housing projects in Brazil, Chile, Colombia, Costa Rica, Mexico, Peru and Uruguay. Its latest foray is a new $30 million joint venture to build thousands of low-income housing units in Brazil. The joint venture is Paladin’s second with Brazil-based home builder Abramar.

  • First-half fundraising dominated by 12 mega-funds

    Institutional capital continues to favor large real estate funds sponsored by proven investment managers. Funds that closed during the first half of 2014 totaled $39.4 billion, according to the Institutional Real Estate FundTracker database. Of that first-half total, 12 mega-funds ($1 billion or more) accounted for 67 percent — $26.6 billion — of the equity raised. 


  • ARC Hospitality adds 126 hotels

    There is going to be a lot more room at the inn if American Realty Capital Hospitality Trust successfully closes its $1.93 billion deal to buy 126 hotels in 35 states from Goldman Sachs Group.

  • Millennials finally cracking the housing market

    For many American parents, the nest has been anything but empty since the Great Recession disenfranchised legions of millennials and drove them back to the warm, expense-free bosom of mom and dad’s place. But the nation is waking up from its long, nightmarish slumber, according to a report from Harvard University’s Joint Center for Housing Studies, which has projected that millennials will begin moving into their own residences in droves, creating 24 million new households between 2015 and 2025.

  • U.S. property sales boom during Q2

    Based on its second quarter 2014 performance, it would not be an overstatement to officially declare the U.S. commercial real estate industry a juggernaut. The dollar volume of commercial properties priced at $10 million or more sold during the quarter advanced 27.5 percent higher than the same quarter of 2013.


  • It used to be simple: Investors' economic motivations have gotten complicated

    One of my favorite Will Rogers sayings is, “Things ain’t what they used to be and probably never was.” That is, as time moves on, one tends to develop an overly fond and idyllic view of just how things used to be.

  • USAA launches European operations

    If you are high on European investing, what better place to set up shop than Amsterdam, probably the most libertine city on the continent? That is how USAA Real Estate Co. is rolling these days with the launch of its European investment operations, to be based in that very city. Its initial focus: providing capital for logistics development in Europe.

  • Redefining medical office: Technology, new markets and consumer demand are transforming healthcare

    Investors have become increasingly interested in the benefits that have been associated with medical office buildings, based on their relative performance to traditional office during the recent economic downturn and capital markets dislocation. Investors have been attracted to the property type’s low tenant turnover, compelling tenant credit profiles and ability to access financing. Given this more competitive investment environment and with recent market and Affordable Care Act changes that affect healthcare and its delivery systems, it is clear that, in addition to traditional medical office buildings, new forms of healthcare delivery real estate warrant institutional investors’ attention.


  • New frontiers in office: Africa is home to top emerging markets for office investments

    Africa contains six of the top 10 most efficient and transparent emerging markets for office investment worldwide, according to a new report from Cushman & Wakefield titled Emerging and Frontier Markets: Assessing Risk and Opportunity, including the top four emerging markets for office investment. (Note that Cushman & Wakefield no longer includes the BRIC economies in its grouping of emerging markets, as these countries have already largely emerged.)

  • Millennial impact: Sustainability and flexible workspaces in Montreal

    In September 2014, Montreal hosts the annual UNPRI In-Person Conference, a dialogue between decision makers in the international investment community on environmental, social and governance issues. In recent years, green buildings have been a hot topic given that the built environment is responsible for 40 percent of global energy use and 33 percent of greenhouse gas emissions. 

  • Many happy returns: Putting time-weighted and dollar-weighted indices on the scale

    The NCREIF Property Index, one of the industry’s most respected benchmarks, is based on time-weighted returns, or TWR. The return for each individual quarter can be interpreted as an estimate of an internal rate of return for that property for the quarter. The quarterly returns are then chain-linked such that each quarter weighs the same in the calculation of a return over time, such as an annualized or since-inception return.