More dry powder for Americas as European banks pull back

Total money raised for global real estate investment fell for the first time since 2011, but portion set aside for Americas climbed

TRD New York /
Mar.March 14, 2017 02:30 PM

The amount of equity set aside for real estate in the Americas exceeded Europe, the Middle East and Africa for the first time as wary European banks tighten their purse strings.

For the first time since 2011, the amount of money available for real estate investment across the globe declined, falling 2 percent on the year to $435 billion, according to a Cushman & Wakefield report cited by Bloomberg.

Led by a strong dollar, equity available for real estate in the Americas climbed 8.2 percent as investors sought to protect themselves from inflation.

“As the real estate cycle enters a stage of maturity in many key markets, investor focus has shifted from raising new funds to identifying and deploying capital already allocated to the sector,” read Cushman’s report. “Banks and alternative lenders saw a large rise in new debt origination from 2014 to 2016, but this trend appears to have moderated in 2016, alongside a slowdown in investment transaction volumes.”

Alternative lenders – also known as shadow banks – such as the Blackstone Group and Starwood Property Trust are increasingly stepping in to fill the void as regulated banks pull back. At the end of 2016, real estate funds’ dry powder stood at a record $237 billion, up from $136 billion in 2012. [Bloomberg]Rich Bockmann

Related Articles

With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

4650 Broadway (Credit: Google Maps)

Inwood site goes for twice what seller paid last year

WeWork co-CEOs Artie Minson and Sebastian Gunningham

WeWork under pressure as losses soar to $1.25B

195 Broadway and L&L Holding's David Levinson and Robert Lapidus (Credit: Google Maps and L&L Holding)

L&L, Safehold lock in $592M in financing for Downtown building

Tore Steen, CEO of CrowdStreet (Credit: iStock)

CrowdStreet lands $12M in financing, hires execs

A rendering of the The Epic in Dallas, Texas and Westdale CEO Joe Beard (Credit: Westdale, Wikipedia)

No panic: Westdale mulls $50M Series B bond raise in Tel Aviv

(Credit: iStock)

S&P hits another record, but real estate stocks don’t follow suit