Horizon threats are now here

Even prior to the coronavirus outbreak that began in Wuhan, China, some market participants viewed China as a potential threat to the long years of relative stability in real estate.

“A slowdown in the Chinese economy could lead to a correction in global demand,” says Paul Kennedy, head of strategy and portfolio manager for real estate in Europe at JP Morgan Asset Management. “Given limited scope for monetary support, this could lead to a correction in rental and capital values.”

John Baczewski, president of Real Estate Fiduciary Services, counters the United States is perfectly conditioned as a dark horse of disruption. With discourse so uncivil and politics so partisan, he believes the nightmare could be “a US internal, self-inflicted wound which disrupts life as we know it.”

Still, such geopolitical concerns face all investors, whatever their asset class. Ralf Kind, head of real estate debt at Edmond de Rothschild Real Estate Investment Management