The latest U.S. plan sponsor survey, Tax-Exempt Real Estate Investment 2011, conducted by Institutional Real Estate, Inc. and Kingsley Associates, offers some mixed findingsl. The good news is that investors rank real estate as the most attractive asset class on a risk-adjusted basis, quite a turnaround from the previous year’s survey when real estate ranked dead last by a healthy margin. For investment managers, the survey brings good tidings in the fact that investors’ real estate holdings are substantially below target allocations; they will need to invest a significant amount of capital to close the gap. The bad news — at least for investment managers — is that survey respondents expect to commit only $30 billion of new capital to real estate in 2011, which would be less than the $35 billion the group committed in 2010.
From the Current Issue
It seems as if Brazil is on nearly everyone’s radar screen these days. Brazil benefits from a large and expanding economy, a growing urban population and youthful demographic profile, expanding real estate market capitalization, lessened levels of systemic market risk, and proven political and financial stability. Furthermore, strong capital appreciation and high rental growth rates were recorded in real estate markets of the country during its economic recovery from 2004 through the middle of 2008. Going forward, we believe that this strong performance will likely continue despite a temporary slowdown brought on by the global recession.
Apartment investments historically provide the best total risk-adjusted returns among major property categories and have become a favored property sector for institutional and high-net-worth investors. Emerging Trends in Real Estate 2011,a well-respected survey of real estate industry leaders conducted by the Urban Land Institute and Price-waterhouseCoopers, ranks apartments as having the best investment prospects among all major categories in 2011. Our research points to three compelling reasons for investing in well-located apartment properties, despite lackluster economic outlooks
If you watch Glee, you understand the title to this article. If you aren’t a Glee fan, the show features a middle-aged, tall, smart-talking, cynical blond named Sue Sylvester who offers up her opinions in a segment of the show titled, “And That’s How Sue ‘Cs’ It.” My kids have noted, let’s just say, more than a few similarities between Sue and their mother.
The mood at this year’s Visions, Insights & Perspectives (VIP) Conference in Dana Point, Calif., was more upbeat than last year, but there still were plenty of concerns in the air. Investors still are voicing concerns about investment manager openness and communications, but a lot of healthy dialogue also took place, which, at least from my perch, appeared to be positive and healing.
The Virginia Retirement System (VRS) has been an active player in the real estate investment arena during the past 30 years. The $53 billion fund made more than $1 billion of investments and commitments in 2010. Larry Gray, editor of The Institutional Real Estate Letter – North America, recently spoke with Field Griffith, director, real estate investments, at VRS, to discuss the fund’s investment program, strategies and plans for 2011.