2010AWARDS & AnnuAL REVIEW - PERE

More documents

Recommendations

Info

AnnuAl review | intelleCtuAl ProPertY America’s bifurcation it was a tale of two countries for the us in 2010, with select markets and players focused on core trophy assets having it all and everyone else left to sort through the rubble of the crisis By Zoe Hughes Two Americas confronted real estate investors in 2010. The first America was a place where buyers squeezed into auction rooms for the possibility of snapping up core assets at heavily discounted prices only to see cap rates sink to pre-bubble levels. It was a place where, for those with cash and cash-flowing properties, debt and equity financing was plentiful and where, for those with an established track record, the fundraising doors were actually open. This first America was a place where the real estate “haves” could finally brush off the terrors of the past two years. For the “have-nots”, however, a second, completely different America emerged in 2010. Away from the core properties of the prime cities, the rest of America and its diverse real estate markets experienced a credit environment where spreads often brought tears to many a veterans’ eye and where large amounts of fresh equity usually were required for mortgage refinancings and extensions. It was a place where deal flow sometimes required the wearing of a Hazmat suit and where the fundraising spigot was literally turned off. For anyone watching US real estate markets in 2010, the bifurcation of America was clear to see. On one side, a small number of assets, markets and players reentered the real estate market with vigour. On the other side, everything and everyone else still tended their wounds from the credit crisis. Of course, after suffering declines in property valuations of up to 50 percent, it is only natural for investors to retreat to safety. In real estate, that means core, stabilised assets in 24-hour gateway cities. In the real estate investment management world, safety is perceived in fund managers with a strong track record to call their own. Such instincts, however, were exacerbated in 2010, thanks to the sheer wall of equity sitting on the sidelines and waiting for an opportunistic time to invest. Unlike other crises before, sovereign wealth funds, cash-rich GPs, REITs and non-traditional real estate investors all lined up to target US 30 <strong>PERE</strong> | 2010 AwArds & AnnuAl review On one side, a small number of assets, markets and players re-entered the real estate market with vigour. On the other side, everything and everyone else still tended their wounds real estate, predominantly core assets in the best cities. What resulted was classic supply and demand theory. By the end of the year, veteran GPs were warning of the formation of a debt and equity bubble, where lending was once again becoming “undisciplined” and cap rates in some sectors compressed to sub-5 percent. For managers trying to raise capital for value-added and opportunistic strategies, LPs were largely uninterested. For those with established programmes and funds, some investors even urged their GPs to commit dreaded style drift and alter course to core. Yet even with this attention on core, value-added and opportunistic debt and equity players were not being left to revel in the remaining distress of the market. US property transactions may have risen 141 percent year-on-year in 2010, but deal flow at year-end was still just 24 percent of the peak witnessed in 2007. Opportunities, especially at prices that made sense for private equity real estate GPs, were still few and far between. And where they did exist, opportunities were akin to hand-to-hand warfare. Debt workouts, recapitalisations, restructurings and discounted payoffs required untold amounts of patience, energy and working capital. Indeed, capital is the crux of the problem facing GPs targeting the US in 2011. After raising just $24.3 billion of global value-added and opportunistic capital in 2010 (compared to more than $85 billion at the peak), the firepower of private equity real estate GPs will be severely limited in comparison to the many other players in the market. Take, for instance, the real estate investment intentions of half a dozen sovereign wealth funds and you probably have the equity capabilities of 50 percent of the US REIT market, which have been on fundraising fire in the public markets over the past 18 months. Private equity real estate GPs simply cannot compare, and it’s not something that is expected to change dramatically in 2011. Managers with scale and track records will undoubtedly raise capital in 2011, but few industry professionals expect any fundraising records to be broken in the coming year, adding further pressure to the industry’s ability to take advantage of distressed opportunities when they do (finally) emerge. The tale of two Americas, therefore, can expect to be retold again in 2011.
Real Estate... it’s our world Successful real estate investing starts with a thorough understanding of real estate. In a world of diverse investment options, this has been CB Richard Ellis Investors’ focus for nearly 40 years. Harnessing the strength of the world’s premier commercial real estate services � rm, our investment professionals are real estate experts who are empowered with the advantage of priority access to real-time market information and provide experienced advice through all market cycles. With a broad array of real estate investment programmes, CB Richard Ellis Investors provides a solid foundation to meet your global investment objectives across the entire risk/reward spectrum. SEPARATE ACCOUNTS | STRATEGIC PARTNERS GLOBAL REAL ESTATE SECURITIES | GLOBAL MULTI MANAGER CAPITAL PARTNERS | CB RICHARD ELLIS REALTY TRUST The Global Real Estate Leader www.cbreinvestors.com
Page 1 and 2: MAR 2011 | perenews.com FOR THE WOR
Page 3 and 4: Senior Editor, Real Estate Erik Kol
Page 5 and 6: OWNERS OPERATORS & INVESTORS IN REA
Page 8 and 9: GLOBAL pg. 8 GLOBAL INDUSTRY FIGURE
Page 10 and 11: GLOBAL INDUSTRY FIGURE OF THE YEAR
Page 12 and 13: GLOBAL When it comes to deals, you
Page 14 and 15: nORTH AMERICA INDUSTRY FIGURE OF TH
Page 16 and 17: nORTH AMERICA FUNDRAISE OF THE YEAR
Page 18: EuROPE INDUSTRY FIGURE OF THE YEAR
Page 21 and 22: We are honored to receive the PERE
Page 23 and 24: ASIA INDUSTRY FIGURE OF THE YEAR AS
Page 25 and 26: Brazil Canada China France Germany
Page 27 and 28: AnnuAL REVIEW
Page 29 and 30: Taking all this into consideration,
Page 31: AnnuAL REVIEW | AMERICAS
Page 35 and 36: As one real estate deal professiona
Page 37 and 38: Investors, among others. After bein
Page 39 and 40: In June, Morgan Stanley Real Estate
Page 41 and 42: AnnuAL REVIEW | EuROPE
Page 43 and 44: For further information please cont
Page 45 and 46: seas real estate and had been large
Page 47 and 48: 3Throwing down the gauntlet the tow
Page 49 and 50: Political football An excerpt from
Page 51 and 52: (L to R) Bernard Phang and Peter Pe
Page 53 and 54: AnnuAL REVIEW | ASIA
Page 55 and 56: ThE DEfInITIvE guIDE TO rEal EsTaTE
Page 57 and 58: Trap for some, honey for others des
Page 59 and 60: disaffected investor pools to do li
Page 61 and 62: A warning to all general partners a
Page 63 and 64: AnnuAL REVIEW | DATA
Page 65 and 66: 2010 Rank Name of Firm Headquarters
Page 67 and 68: EUROPE 2011 REALISING GROWTH IN NEW
Page 69: PERE MAr 2011

2010AWARDS & AnnuAL REVIEW - PERE

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?