Real Capital Analytics (RCA) Global Capital Trends: 2012 Year in Review
On February 19, 2013, RCA published their Global Capital Trends: 2012 Year in Review. With RCA’s kind permission I offer the following excerpts taken directly from the report:
- The apartment sector was a standout amongst property types, particularly in the U.S. and Europe.
- Cross-border capital remains keenly focused on the largest, most liquid markets where pricing for trophy properties has diverted from the ordinary.
- Office properties in London are far and away the most actively traded and most favored targets of property investors.
- New York City, London and Tokyo remained at the top of the most active list. However, Paris dropped from 4th place in 2011 to 6th place in 2012 as Los Angeles advanced up a notch and San Francisco moved into the top 5.
- Office markets across Europe accounted for 44% of all transaction volume in 2012. 60% of office transactions took place in just six cities – London, Paris, Berlin, Frankfurt, Munich and Stockholm.
This report reinforces the theme that many investors are simply looking for the safety of reliable cash flow. Maybe the analysis of investment opportunities today is as fundamental as “a bird in the hand is worth two in the bush.” What are your thoughts on this? Send me a note and I’ll post the feedback (without attribution) next week to get a better sense of the investment climate.
PREA / IPD Index Launch
A star-studded audience of 200+ commercial real estate professionals filled a meeting room in New York City on February 21, 2013 for the IPD (Investment Property Databank) U.S. Real Estate Investment Forum. The celebrity of the day however was not a person, but rather an index. The launch of the Pension Real Estate Association (PREA) / IPD U.S. Property Fund Index is notable with some very large funds already participating. Adoption will be the key. The industry will be watching to see which institutional investors begin to benchmark to this new index vs. indices they have historically used. I salute the birth of this new index as it gives pension funds an additional tool to make better-informed investment decisions.
The other day I had lunch with a long-time industry friend. Not having seen each other for some time we were eager to catch up over our Soba noodles. Later that day I got an email from her. “I can't tell you how happy it made me feel to see you so happy - it is contagious.” The reason I chose to mention this is not to brag about how happy I am (which I am :). Rather to bring up the point that energy is contagious. If we surround ourselves with positive thinking and acting people great things can happen. Believe me, I know the difference.
The Journal of Sustainable Real Estate
The website for this publication has recently been updated. Edited by University of San Diego professor, Norm Miller, the Journal seeks to become the definitive resource for information and dialogue on the important subject of real estate sustainability. After all, what matters more than the future of the earth? Norm is looking forward to hearing from potential contributors. You can reach him here.
The Way Things Work
There’s a wonderful little book that contains some big messages. In The Tao of Pooh the author, Benjamin Hoff, explains the principles of Taoism through Winnie the Pooh - the main character in A.A. Milne’s classic of the same name.
While not a practicing Taoist, I subscribe to quite a bit of what Mr. Hoff has written. Early in the book he describes a phenomenon called The Way Things Work, aka The Pooh Way. Later in the book, he offers this:
“Those who do things by The Pooh Way find this sort of thing happening to them all the time. It’s hard to explain, except by example, but it works. Things just happen in the right way, at the right time. At least they do when you let them, when you work with circumstances instead of saying, ‘This isn’t supposed to be happening this way,’ and trying hard to make it happen some other way. If you’re in tune with The Way Things Work then they work the way they need to, no matter what you may think about it at the time. Later on, you can look back and say, ‘Oh, now I understand. That had to happen so that those things could happen, and those had to happen in order for this to happen…’ Then you realize that even if you’d tried to make it all turn out perfectly, you couldn’t have done better, and if you’d really tried, you would have made a mess of the whole thing.”
It’s not easy to just let things be…But, when given a chance, I find that it works. Does it work in business too? In my career the times when I let things play out, without trying to force them, they simply worked out. It takes courage. It takes faith in the power of the universe and in mankind. Maybe it’s worth a try?
Restaurant of the week
the shop (yes, that’s the actual name of the restaurant)
485 5th Avenue (at 41st Street)
New York, NY
Discreetly part of the Andaz Hotel, this is a place you could walk by many times and never realize it is there (trust me, I did).
On The Road…
Mar. 14-15: PREA (Pension Real Estate Association) Spring Conference, Washington, DC
Mar. 17 -19: NAREIM (National Association of Real Estate Investment Managers) Spring CEO Meeting, Santa Monica, CA
Apr. 9 -10: PERE (Private Equity Real Estate Magazine) Global Investor Forum, Los Angeles, CA
Apr. 28 – May 1: CRE (Counselors of Real Estate) Mid-Year Meetings, New York, NY (To include a jam session with the CRE Rock ‘n Roll band, Sound Counsel).
May 29 – 30: IMN (Information Management Network) U.S. Real Estate Opportunity Fund and Private Fund Investing Forum, New York, NY.
June 4 – 5: PERE Summit (Private Equity Real Estate Magazine), London, UK
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