Riding Out the Storm: Investors Hunker Down for a Challenging Year Ahead
It was quite unthinkable at the beginning of 2008 that a financial crisis of historic proportions would be a reality by the year’s end. But now investors are beginning to understand the severity of the situation they’re in, and they’re preparing for the realities ahead.
Before September, investors might have said they were cautiously optimistic about commercial real estate’s near future. Many took comfort that supply had been kept in check and capital seemed plentiful. It was the common view that a downturn, should there be a downturn, would be mild. But all that changed with Lehman Bros. When the $600 billion investment bank filed for bankruptcy protection on Sept. 15, it set off a domino effect of global proportions. In the weeks that followed, stock markets worldwide crashed and entered a period of high volatility, while a considerable number of banking, mortgage and insurance companies failed.
“It was a little bit of a perfect storm,” says Mic