The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Real estate: Investors turn crisis into opportunity

Fundraising among private equity firms for distressed real estate and debt investing has grown to record levels.

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 may themselves be in trouble, that decline looks set to continue.

The other side of the coin, however, is that fundraising among private equity firms for distressed real estate and debt investing has grown to record levels. Private equity real estate funds are hoping to raise $253 billion, of which 37% (or just over $92 billion) is allocated to distressed real estate and debt, according to a report from Preqin, an alternative investments research consultant.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree