- July 2009: Vol. 21 No. 7

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Asset Values Take a Hit: Managers Take Write-Downs, Investors Tighten Purse Strings

by Larry Gray

Real estate investment managers took a broadside hit from the recent global financial markets implosion — a result of the U.S. subprime mortgage crisis — and its subsequent adverse economic fallout. Now, managers are knee-deep in the wreckage, battling a host of challenges including liquidity issues due to the frozen credit markets, softening property fundamentals fueled by global recession, investor redemption requests in some cases, and significant portfolio write-downs in most cases. The damage is evident in the assets under management figures reported in a survey of real estate investment managers conducted by Property Funds Research, a research and information firm and the U.K. branch of Feri EuroRating Services AG, and Institutional Real Estate, Inc., a U.S.-based publishing and consulting firm.

Responses from 113 firms, including many of the largest real estate investment managers around the globe, revealed that portfolio values were down, in some cases by more tha

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