Friday, December 28, 2007

Commercial Real Estate 'Rules' Changed in 2007 - December 27, 2007 - The New York Sun 

Commercial Real Estate 'Rules' Changed in 2007 - December 27, 2007 - The New York Sun

Michael Stoler gives his take on the unforgettable and not-to-be-missed year that was 2007, for commercial real estate.

For owners, operators, and developers of commercial real estate, 2007 will be remembered for the serious changes that have taken place in "the rules of the game."

The turmoil in the credit markets resulted in a decrease in transactions in the fourth quarter and gave further credence to the expression "cash is king" when purchasing an asset. In addition, the market started to reward "relationship banking," and investors who failed to maintain excellent relationships with their investment bankers and balance sheet lenders had few places to go to secure financing.

Over the course of the holiday season, members of the real estate community banded together to commiserate on the turbulent year past and discuss what could be the next industry phenomenon: that real estate investors increasingly will seek to raise their own real estate investment funds.

A number of successful real estate investors were fortunate during the last year of discontent to have public and corporate retirement funds, foreign investors, and high net worth individuals commit to provide funding for both funds and joint ventures.


As we enter 2008, expect real estate investors to look for opportunities to reach out to institutional institutions to fund real estate investment funds and joint venture opportunities.


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