- January 1, 2015: Vol. 27, Number 1

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The European awakening: U.S. investors are once again becoming Europhiles

by Steve Bergsman

Early in the fourth quarter of 2014, the European Central Bank reported the results of a yearlong audit of euro zone lenders. Of the 130 big euro zone banks under review, just 25 showed shortfalls in capital.

The augurs had a field day with that stress test, casting skeletal bits into the air and then reading the signs as the bones fell back to earth and scattered. What did it all mean? The ruins indicated Europe’s economy was healthier than expected and European banks could reverse what they had not been doing, lending money to businesses, which in turn would help the nascent economic recovery.

Real estate soothsayers had a slightly different take: the weaker banks would have to recapitalize, which means more distressed properties should come to market.

“The ECB tested 130 banks, and 105 passed the test,” notes Andy Rofe, managing director-Europe for Invesco Real Estate. “Of the 25, only eight have been asked to raise capital and most of those

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