The Real Deal New York

Stuy Town debacle example of foreign investors getting burned

January 14, 2010 04:28PM

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U.S. real estate debacles can lead to global financial losses — just ask the Government of Singapore Investment Corp, which lost $100 million in the Tishman Speyer-BlackRock Realty travesty at Stuyvesant Town. In the financial downturn, foreign investors are now shying away from the U.S. real estate market, an industry that was once thought of as a sure thing, according to Smart Money magazine. Some notable names, such as Norway’s Government Pension Fund, the China Investment Corporation and Dubai World, have all sustained major losses in the market crash. The turn of events has led some foreign investors to rethink their strategies, according to Mike Maduell, president of the Sovereign Wealth Funds Institute. “They all looked to extend their investments in American real estate assets over the lasts several years, and in most cases their investments were made at the height of the market,” Maduell said. “You had lots of highly leveraged deals in play… but things started to crumble and you didn’t have the cash flow there.”

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