Two men. Two lives. Two deaths. Two stories. Malcolm McLaren, music entrepreneur, punk rock impresario and one-time manager of the notorious Sex Pistols. Lech Kaczynski, lawyer, nationalist, arch-critic of communism and president of Poland. It is doubtful that they ever met. Apart from the coincidence of their untimely deaths in the same week of April, it is improbable that the two men had much in common; it is unlikely, too, given what we know, that they would have got on. But both were seen as members of the “awkward squad”, both took people on a voyage of discovery out of an earlier age that brought them many friends and both will be remembered for what they brought to their task.
From the Current Issue
In 2009, the significant increase in equity values, contrasted against the severe contraction of real estate values, allowed the equity markets to outperform the non-listed real estate market. Despite these recent conditions, risk-adjusted returns for real estate over a 10-year timeframe remain attractive relative to bonds and have far exceeded the equity market. Thus, the performance attributes of real estate can provide benefits in a global multi-asset portfolio.
Asset-based borrowing has long been a prevalent form of financing for corporations with significant corporate real estate holdings as well as for private equity firms and management groups looking to finance the acquisition of these kinds of companies. This type of borrowing continues to be a viable source of funding for companies that have a strong management and a solid business strategy.
Real estate investment managers around the globe continue to suffer from adverse conditions in the financial markets and property markets, although there are some rays of sunshine starting to emerge through the dark clouds. Property indices in Europe and the United States are reporting shrinking levels of depreciation in most markets.
Securitisation was a key catalyst for the recovery of the US commercial real estate market in the 1990s, following the savings and loan (S&L) debacle. We believe that the same reasons for its success in the 1990s hold true today. Despite a number of challenges, fears of past excesses being one of them, we believe that the conditions are in place for the return of securitisation. This article provides a framework of the history, current challenges and our view of the future of the new issuance market for commercial mortgage–backed securities (CMBS).