For market-rate apartments it is the best of times. For affordable multifamily housing it is clearly the worst of times. Without additional capital for the preservation of existing properties and investment in new development, the severe shortage of affordable housing is only going to get wors.
From the Current Issue
There’s a new world order among real estate investment managers, at least at the top, according to a recent global survey of 129 real estate investment managers conducted by UK-based Property Funds Research.
Investors typically focus on a commingled fund’s organizational documents and the side letter, because those documents typically establish the basic rights, duties and obligations of the parties. However, there are also significant issues to consider when reviewing and completing subscription documents.
Dr. Nils Kok, real estate finance professor at Maastricht University, a visiting economist at the University of California at Berkeley, and co-founder and executive director of the Global Real Estate Sustainability Benchmark, recently spoke with Mike Consol, editor of The Institutional Real Estate Letter – North America, about the strides that his organisation and the real estate industry are making in turning sustainable practices into higher profitability and reduced risk.
The long-term effects of the Great Recession on institutional investor interest in real estate have yet to be surmised. At this transition point in the recovery, what is happening is a consistent flow of capital to the asset class (indicating its growing durability among fund managers); slight changes of focus to value-added and global investing; consolidation of investments to a smaller number of managers; and pressure on managers to strengthen governance, increase transparency, and offer flexibility in their fee structures.
Amid expectations of further inflationary pressures and securities market volatility, institutional real estate investment professionals are migrating toward greater real assets allocations, and more comprehensive related strategies.
There’s inherent risk in the rush to the overheated core market, and the real opportunities can be found in value-added and opportunistic strategies, particularly in the world’s emerging economies.
Changing logistics practices and new retail trends are combining to make warehouse/distribution buildings an attractive investment. Rising fuel costs and increasing labor costs in China have caused some manufacturers to rethink their product sourcing, and some have begun to “reshore” their production to North America.
One day, U.S. political and business leaders will awaken to stark numbers certifying that its GDP no longer ranks first on the globe but second to that of China. The consensus seems to be, the growth of China’s economy is to be cheered and not feared.