Property values are approaching their lowest level since the S&L crisis of the early 1990s. We are witnessing a historic opportunity to identify and acquire well-located, high-quality assets under distressed ownership—with the potential to create substantial wealth for the long term.

WHY COMMERCIAL REAL ESTATE INVESTMENT?

High-quality real estate, purchased at appropriate values, is a hard asset that can provide a balance of cash flow and appreciation. And real estate remains a prudent asset class in a diversified investment portfolio. In addition, real estate provides an inflation hedge, which may become very important in the next few years.

Recent events may lead some to believe that real estate is a highly risky investment. What happened? Lured by attractive promised returns or spurred by the perceived inadequacy of unleveraged returns, investors borrowed short-term capital to acquire long-term assets at over-inflated values. But the situation has changed.

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WHY NOW?

Market upheavals provide tremendous opportunities. Over the past seven years, the U.S. has seen the most prolific value surge in commercial real estate history. A pricing correction is now evolving, driven by the credit crisis and a softening economy.

We are experiencing a perfect storm in commercial real estate:

  • Capital markets de-leveraging
  • Liquidity constraints
  • Institutional portfolio re-balancing
  • Worst recession in 40 years
  • U.S. $1.3 trillion of commercial real estate loan maturities in the next four years

Taken together, these factors assure opportunities for those with cash to acquire debt/assets/funds at significantly discounted values. Most investors will sit on the sidelines as these opportunities unfold.