Real estate: Investors turn crisis into opportunity

Real estate worldwide has suffered badly from the global economic downturn. Developers are under attack from a combination of falling property values and a credit freeze that has dramatically narrowed refinancing options. Real estate research firm Real Capital Analytics estimates that about $10 billion of commercial property worldwide has been foreclosed upon, with a further $72 billion in trouble. It comes as no surprise that global real estate sales last year fell 58% to $504 billion. The worst may be yet to come. RCA estimates that about $170 billion of US commercial mortgages are expected to have to refinance this year, compared with $36 billion in Britain and $12.7 billion in Japan. Moody's Investors Service says US commercial property prices are already down 21% from their October 2007 peak. But with more than 40% of the troubled or foreclosed loans reliant on monthly financing from lenders who...