In 2006–2007, the years leading up to the global financial crisis (GFC), a record volume of real estate investment and lending took place. By late 2008, it became apparent this massive vintage was to be among history’s worst performing. How can virtually everyone in the industry have missed all the signs that valuations were hopelessly bloated and vulnerable to a quick and powerful correction? Let’s call this phenomenon GVOC, standing for “giant vintage over the cliff.” Now, in the wake of another period in 2018–2021 of very high lending and investing volume, it seems that we may be on the verge of witnessing a similar carnage.

In the GFC, the downturn decimated the investments made by many of the industry’s biggest names, including Goldman Sachs’ Whitehall Funds and Morgan Stanley’s MSREF unit, among many others. Losses were historic, franchises were impaired, and careers were damaged. In 2023, there already are whispers of problems in the fund vehicles man