EXIT OPTIONS FOR OPPORTUNISTIC REAL ESTATE INVESTORS AND THEIR POTENTIAL EFFECTS ON REAL ESTATE MARKETS: GERMAN EVIDENCE
||Beyerle, Thomas; Nico B. Rottke
||EXIT OPTIONS FOR OPPORTUNISTIC REAL ESTATE INVESTORS AND THEIR POTENTIAL EFFECTS ON REAL ESTATE MARKETS: GERMAN EVIDENCE
||Book of Abstracts: 13th Annual European Real Estate Society Conference in Weimar, Germany
||In several worldwide real estate markets, the phenomenon can be observed that in times of imbalanced market situations, together with a weak economic environment, international real estate investors with a high yield “opportunistic” strategy, foremost US or U.K. funds, enter national markets and buy large real estate portfolios, real estate companies or non performing loan packages. Often, the imbalanced situation gets solved after some years as these opportunistic investors bring together supply and demand when equity resources are low. As this type of investor has a short term horizon, the portfolios are likely to be sold within a time frame of five to seven years. As the entry period typically happens to be within a short time slot as well - due to the economic environment - the exit period of most opportunistic investors will also be within a short time frame. This paper provides empirical evidence for the German real estate markets by analyzing the effect of portfolio purchases and potential sales of large residential real estate transactions from 1997 to 2005. Hypotheses are generated what will happen within the German residential real estate sector up until 2012. Comparisons are drawn to real estate markets in the US and the U.K.
||opportunity funds; opportunistic investment; exit; indirect real estate vehicles; portfolio transactions; residential real estate; absorption rates; vacancy rates
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