| IN THE
November
2, 2009 ISSUE |
CalPERS Goes On the Offensive to Combat
‘Misinformation’
In a radical departure from its media-shy nature, the
nation’s largest pension fund is launching a new online campaign to
help counteract an avalanche of challenges in recent months.
The California Public Employees’ Retirement System (CalPERS) is often
viewed as the bellwether of institutional investors, with some $200
billion in total assets under management.
But steep losses over the past year have put the fund under a
microscope. The value of CalPERS’ commercial real estate portfolio,
for example, fell 35.8% to $13.6 billion over the 12-month period that
ended on June 30.
Real Estate Downturn of the Early ’90s Differs From Today’s
Crash In Important Ways
Many market observers have pointed out similarities
between the current downturn in commercial real estate and the downturn
in the early 1990s. Both were preceded by an extended period of relaxed
underwriting standards, excess capital chasing returns, significant cap
rate compression, and steep increases in asset values. It is useful to
compare and contrast key elements of the two periods in order to
establish a reference point for today’s investment strategies.
Two key regulatory changes during the 1980s paved the way for
theoverbuilding that defined the 1990s recession in commercial real
estate. The 1982 tax cuts included provisions that allowed for generous
depreciation allowances and tax shelters for investors. Also during the
1980s, the deregulation of the savings and loan industry allowed these
institutions to expand their investments to include commercial
mortgages.
Former First Industrial Realty CEO Launches Industrial Real
Estate Investment Firm
Michael W. Brennan, former president and CEO of First
Industrial Realty Trust (NYSE: FR), recently announced the launch of
Brennan Investment Group LLC, a privately held industrial real estate
investment firm based in Chicago.
Brennan Investment Group will opportunistically acquire, develop and
operate industrial properties in select major metropolitan markets
throughout the United States. The firm’s managing principals will
co-invest with private and institutional capital to pursue single asset
and portfolio acquisitions as well as debt
acquisitions.
Investor Sentiment Survey, Final Chance to Win Gift
Card
With the lingering effects of a deep recession and credit
crunch continuing to bog down the U.S. economy, investors are weighing
the full impact on commercial real estate. Against this challenging
economic backdrop, National Real Estate Investor, Retail Traffic and
Marcus & Millichap are conducting the third quarterly Investor Sentiment
study that measures confidence on a host of trends including property
valuations, effective rents, acquisition and disposition strategies, as
well as employment.
To ensure that we provide our readers with the most timely analysis, we
need your help as an industry professional and valued National Real
Estate Investor subscriber. Additionally, at the end of the survey, you
will have the option to enter into a drawing for one of two $100 Visa
gift cards. Your answers will be kept completely confidential and used
only in tabulation with others.
Use the link below to access the survey.
Investor
Sentiment Survey.
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