Real estate capital markets seemed to be the largest concern in the 2008. To no surprise, the most discussed topic is the lack of capital, especially coming from debt markets. Still, 2008 will be a tough year for all real estate markets and lenders, due to a lack of liquidity caused by US subprime problems. But things changed during the last two years and the business which once was unsure, become to grow to a successful one, which happens to diversify into many other sectors of real estate.
For example, in North America, survey participants “favoured” real estate markets that continue to focus 24-hour cities or global, gateway markets. One interviewee strongly agreed: “If you want to be successful in this business, you need to be on global pathways.” Seattle leads this list and gained further status as the preeminent US global gateway.
As economies and markets continue to grow in many areas, the focus on development grows as well. Overall, survey responses show that investors have allocated the largest portion of their portfolios to development, followed by core investments.
One thing that is clear is this simple observation – the more things change, the more they stay the same. The real estate market passed through major economic upheavals in the past – the Great Depression of the 1930s, the Oil Crisis and Stagflation on the mod – to late 1970, the Saving & Loan crisis of the late 1980s and early 1990s. Each time we have emerged largely intact; scarred a bit, perhaps; changed a bit, certainly; but also stronger and wiser for having gone through each crisis.
We have faced crises of confidence in the past and no doubt we will do so again in the future. Once confidence in the real estate markets rebuild, and investors resume their proper places on the paying field, we no doubt will witness the re-emergence and revitalization of the perception of real estate as a steady, preferred and reliable investment class.