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Active Private Equity Real Estate Strategy

Author: David J. Lynn
Year: Copyright 2009
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The subprime fallout and credit crisis have triggered a major transition in U.S. real estate. With tightening lending and underwriting standards, speculative investments and construction projects are likely to limited, resulting in constrained supply and healthier fundamentals over the long term. Looking forward, market participants anticipate that the coming years will be fraught with challenges as well as opportunities.

Active Private Equity Real Estate Strategy is a collection of abridged market analyses, forecasts, and strategy papers from the ING Clarion Partners' Research & Investment Strategy (RIS) group. Divided into two comprehensive parts, this practical guide provides you with an informative overview of real estate markets, forecasts, and recent trends in part one, and presents specific active strategies in private equity real estate investing in part two.

  • Includes a simulation of the economy in recession and the expected effects on the commercial real estate industry

  • Offers examples of portfolio analysis and recommendations using ING Clarion's forecasts and Modern Portfolio Theory

  • Focuses on multifamily, hotel, land, and industrial investments

  • Demonstrates the use of the various tools available to the private equity real estate investor

Written with both the individual and institutional real estate investor in mind, this book offers specific private equity strategies for investing in real estate during volatile times.

Table of Contents
Preface ix
Disclaimer xiii
Acknowledgments xv
About the Authors xvii
Part I: Market Analysis and Forecasts 1
Chapter 1: Overview of the U.S. Real Estate Market 3
Chapter 2: Forecasting the U.S. Market 19
Chapter 3: Recession Simulation and its Effects on Real Estate 25
Chapter 4: Subprime Fallout: The Impact on Commercial Real Estate 41
Chapter 5: Capital Markets: Dramatic Shifts and Opportunities 47
Chapter 6: The Bid-Ask Problem and Game Theory 53
Part II: Active Strategies 67
Chapter 7: Residential Land Investment 69
Chapter 8: The U.S. Hotel Market and Strategy 103
Chapter 9: Global Gateway Industrial Market Investment 125
Chapter 10: The Opportunity in Senior Housing 159
Chapter 11: Active Portfolio Management Using Modern Portfolio Theory 187
Chapter 12: Derivatives in Private Equity Real Estate 217
Chapter 13: Opportunities in Infrastructure Investment 239
Appendix A Typical Land Development Pro Forma Analysis -- Three Scenarios 247
Appendix B U.S. Hotel Chain Scales 253
Appendix C Modern Portfolio Theory in Real Estate Portfolio Analysis 257
Appendix D Commercial Real Estate Indexes 259
Appendix E Example NPI Forecast Methodology 263
Selected Bibliography 265
Index 267