|
|
 |
1 November 2000
Real Estate Capital Markets Remain Disciplined, Say Industry Experts
Emerging Trends in Real Estate 2001: Investors Conditioned to Remain Controlled, Selective
“The invisible hands are everywhere.”
NEW YORK, (November 1, 2000) – The real estate capital markets have been largely responsible for helping establish a new paradigm leading to shallower market cycles and extended periods of equilibrium, say commercial real estate experts interviewed for Emerging Trends in Real Estate 2001. They credit the public markets, regulators, rating agencies, stock markets and the Internet for the wealth of more accurate real-time information and analysis that has helped rationalize the real estate investment sector and provide greater stability.
With investors more conditioned to remain relatively controlled and selective, capital availability will be down from all major players next year, according to the report. Emerging Trends is written and published jointly by PricewaterhouseCoopers and Lend Lease Real Estate Investments. It is based on in-depth interviews of more than 150 leading real estate authorities.
Pension funds and real estate investment trusts (REITs) should maintain their “King Kong–Godzilla predominance” in the commercial real estate equity arena for the near future, currently sharing 75 percent of the market, reports Emerging Trends.
Real estate comprises less than two percent of pension funds’ overall investment portfolios with funds either pursuing alternative opportunistic and value-enhanced strategies or seeking asset-class diversification through core investing. The core investing they are doing is concentrated in private commingled real estate funds and separate accounts, with apartments and industrials as their favorite property types. The report notes that they are looking to REIT investments for high dividends, bond-plus total returns and diversification benefits.
Observers expect REIT buyout and merger activity to accelerate in the wake of the recent market rebound, and as larger-cap REITs outperform their smaller brethren. Overall returns are expected in the 12 percent range in 2001.
Commercial banks continue to dominate the debt markets with a market share approaching 40 percent. The Emerging Trends consensus is that while some regional lenders’ underwriting discipline appears to have slipped a bit, the bankers generally are succeeding in keeping development activity under control in most markets.
Respondents generally agree that the public real estate markets are maturing well, as fixed-income investors and others have become comfortable with commercial mortgage-backed securities (CMBS) and as sophisticated buyers take advantage of B-piece loan pool opportunities.
While maintaining a significant market position, life insurers have been eclipsed by banks and CMBS as a source of capital in the debt market.
Copies of Emerging Trends in Real Estate 2001 are available for $95 by calling Lorna Butts, 301-897-4629 or Bonnie White, 212-554-4168. They also can be obtained by emailing requests to emergingtrends@lendleaserei.com. or lorna.butts@us.pwcglobal.com.
With a worldwide network of 7000 professionals, PricewaterhouseCoopers' Financial Advisory Services ("FAS") practice provides creative solutions and ideas that increase value to clients during critical periods and when they are making important decisions that define their future. The FAS business is organized along five product lines. The Business Recovery Services, Dispute Analysis & Investigations, and Corporate Value Consulting product lines are the largest in the world. Our Dispute Analysis & Investigations product line was ranked number one in the US by readers of Euromoney's International Commercial Litigation. The Project Finance & Privatization product line rated second in Privatisation International's global league table by number of privatization financial advisory assignments and number one in Project Finance International's global ranking by number of project finance advisory mandates. The Mergers & Acquisitions product line was second in the world in number of deals completed, according to Securities Data Company.
PricewaterhouseCoopers (www.pwcglobal.com) is the world's largest professional services organization. Drawing on the knowledge and skills of more than 150,000 people in 150 countries, the organization helps its clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance in an Internet-enabled world.
PricewaterhouseCoopers refers to the member firms of the worldwide PricewaterhouseCoopers organization.
Lend Lease Real Estate Investments (www.lendleaserei.com) is one of the largest real estate investment managers in the world and a leading U.S. real estate advisor to pension funds. The company has $41 billion in real estate and commercial mortgages under management for institutional and private clients in the US. In addition, the Group services some $56 billion of commercial real estate loans.
On a worldwide basis the Lend Lease Group is an integrated real estate funds management and services business comprising funds management, project management and construction and property development. In real estate funds management, Lend Lease provides equity and debt origination and management, in public and private markets, and manages $48 billion on behalf of clients globally. Lend Lease provides project management and construction services in almost 40 countries, usually on a fee for service basis, for a blue chip client base with a high level of repeat business. In property development, Lend Lease has expertise in commercial, retail and complex urban mixed use developments, with a strong retail focus, in Europe, Asia, Australia and the US, utilizing primarily third party capital.
FROM:
Lend Lease Real Estate Investments, Inc.
Contact: Jonathan Miller
(212) 554-1967, jmiller@lendleaserei.com
PricewaterhouseCoopers LLP
Contact: Juliet Arrieta
(212) 597-3587, juliet.arrieta@us.pwcglobal.com
Rubenstein Associates, Inc.
Public Relations
Contact: Rick Matthews
(212) 843-8007, rmatth@rubenstein.com
media
|