Will Ye No Come Back Again?
It was not long ago that the commercial real estate markets were humming along. Institutions were raising allocations, funds were clamouring to get their hands on virtually any type of asset and investors were willing to accept miniscule yields just to get into the game. But times change, and the song does not remain the same.
The second half of 2008 unfolded like few envisioned. At the epicentre of it all were the debt capital markets — the lubrication that greases the wheels of both the global economy and the real estate investment markets. At the time of writing, the real estate capital markets were virtually locked, which had investors singing a very different tune. Recent extraordinary steps around the world to nationalise banks and otherwise prop up institutions that had questionable balance sheets should bring some much needed stability to the capital markets, but the situation is dynamic and we remain in uncharted territory.