Global market outlook
Trends in real estate
The real estate private equity funds sector is facing a devise pure-play real estate platforms and boost staff
period of significant structural and cultural change, with to meet the current rush of demand. Further, offshore
cautious investors, large-scale regulatory overhauls and centers are increasingly attracting business from large
the ongoing illiquidity of the capital markets all driving funds looking to outsource their back-office functions to
the change. Considering the impact of these factors, lower-cost areas. Overall, the challenges posed by the
the emerging environment for funds is not for the faint present environment will ultimately make it easier for
of heart. Deal flow remains slow in many markets. fund managers to build more efficient, transparent and
Fund-raising continues to be challenging, especially for scalable platforms, which will, in turn, attract a wider
new fund platforms. Also, there is potential for market range of investors from around the world to the real
consolidation where some of the larger platforms may estate funds sector.
look to acquire niche, smaller platforms or mid-tier
Perhaps the biggest challenge for global real estate
managers will look to merge. Some fund managers are
fund managers, however, remains beyond their control:
also looking at corporate partners to acquire a stake in
continued illiquidity in the capital markets. The lack of
the GP. Further, we may see some of the smaller real
available bank debt has stifled deal flow and limited
estate managers exit the market altogether.
the pace of recovery outside of primary markets in
Amid the many uncertainties, however, this is a North America and Europe. Even the once booming
period in which creative investors can thrive. Indeed, emerging markets are feeling the impact of bank lending
devising and offering creative solutions for the market constraints although their economic growth trends
will be a key differentiator for successful funds in this remain positive.
Nevertheless, restrictions on banks and withdrawal of
In terms of investor relationships, this means forging new capital from the real estate markets have created plenty
partnership arrangements and, increasingly, opening of new opportunity for real estate private equity funds.
separate accounts with individual investors. The amount Given the large number of assets facing imminent loan
of institutional and foreign capital chasing real estate maturities and broken capital structures, many funds are
opportunities is at near-record levels in gateway cities finding opportunities in the refinancing space. Senior
across North America and Western Europe. However, debt funds are also gaining momentum, particularly
while many institutional investors continue to seek the where banks are more limited by regulation than liquidity,
local expertise and services provided by fund managers, as in China. Most surprising, however, is growth in the
they are insisting on more transparency and oversight on secondary trading market for closed-ended funds. By
their investments. They are also challenging many terms, allowing limited partners to trade out their positions,
which means fund managers may need to subsist on less this solution has opened new doors for opportunistic
to retain and attract new business. investors while also helping to restore investors’
confidence in the real estate funds sector.
In addition to heightened investor requirements, tighter
regulatory standards are forcing fund managers to In this year’s Global Market Outlook, we highlight the
reexamine their business and operational strategies. Two ongoing challenges private equity real estate funds face
major pieces of legislation are having a direct impact from investors, regulators and the capital markets. While
on alternative investment funds, with the objective of collectively these factors have created a difficult business
improving transparency and oversight of the sector: the environment and have prolonged uncertainty in the
Dodd-Frank Act in the US and the second phase of the market, they have also propelled large-scale structural
Alternative Investment Fund Managers Directive (AIFM) change in the sector. In this report, we provide insights
in Europe. Both measures have significant near-term into how the emergence of these “new rules” has set
compliance requirements that will be costly and will the stage for creativity and innovation in all real estate
necessitate large-scale structural change for many firms. markets globally.
The upside to the pressures of intensifying investor
demands and regulatory scrutiny is that new solutions
are emerging within the real estate funds sector to
improve operational efficiency and reduce costs.
Software vendors and fund administration service Mark Grinis
providers, which historically have not seen a great Global Real Estate Fund Leader
deal of activity from this sector, are rapidly working to Ernst & Young
About our real estate private
equity fund survey
We embarked on a survey of real estate
private equity funds to enhance the
industry’s knowledge, as well as our own, of
what we have seen as a large and growing
sector. The survey, which comprised
11 questions covering many subjects,
including capital markets, financial and
performance reporting and taxes, was sent
to more than 300 real estate private equity
managers. Not all respondents answered
every question, and certain responses
were supplemented with information
gathered in personal interviews with the
Ernst & Young has maintained the
confidentiality of all responses and
respondents. Under no circumstances will
the identity of the respondents be revealed
to the public or the other respondents.
In preparing this report, Ernst & Young
relied on the data and information
supplied by the respondents. We did not
attempt to verify the responses provided
by the respondents, and we do not take
responsibility for the accuracy or reliability
of the data.
Global market outlook: Trends in real estate private equity 1
Structural shifts in the real estate funds sector
The environment for real estate funds is facing major structural changes. Driven by regulatory
requirements and heightened demands from investors, the changes are not merely cyclical adjustments
to the market. Rather, funds will have to adapt to a new regime.
Costs on the rise source of profit for fund managers.
The changes will add significant pressure — and costs — to many Because of the new fee structures, a fund manager’s ability
funds already dealing with substantially lower asset valuations to achieve scale will be a key factor in its success in the new
than three to five years ago. From the regulatory standpoint, environment. This will naturally come more easily to established
costs associated with meeting the new standards that directly global fund managers than to small to mid-market operators.
impact the fund sector, such as Dodd-Frank and AIFM, are just one In turn, there is the potential in the market to see many smaller
slice of the pie. Funds will also be affected by indirect regulatory players absorbed by larger ones while many others will simply exit
changes. Basel III is a good example: with its implementation, the the market. Consolidation should ultimately have a positive impact
capital reserve requirements for banks will force them to hold more on the overall real estate fund space, however, by helping to scale
reserves against commercial property lending. Thus, the increased down the number of inexperienced and excessively risky managers
cost of capital for banks will restrict the leverage available to funds. that joined the market during its peak.
In spite of the associated costs, there is a clear upside to stricter
regulatory measures as well. They will continue nudging real
Top 10 predictors of real estate estate in the direction of mainstream investments by improving
fund-raising success: transparency and encouraging greater professionalism and
1. Having a strong alignment of interests sophistication in the market.
2. Having a cornerstone investor/solid backing from
Investment trends on the rise
This period in the real estate industry has also given rise to new
3. Being a follow-on fund
investment trends, several of which could have a notable corrective
4. Having a focused investment sector
impact on the market.
5. Being able to identify and articulate a
strong pipeline First, with regard to the managers’ trying to raise new funds, those
that are coming to market are taking six to seven months longer to
6. Having a strong track record in good and
achieve their first close than they did on average during the peak.
Also, one-on-one deals between investors and fund managers are
7. Offering a niche opportunity
expected to keep increasing for the foreseeable future. On the
8. Demonstrating an ability to find unique deals equity side, this could eventually make room for fund managers
9. Focusing on making money in absolute terms to lead joint ventures or club deals between multiple investors on
10. Being competitive on fees individual transactions and then syndicate the interests over time.
Source: Ernst & Young LLP
In addition, with the multitude of assets that will require refinancing
in the next couple of years, many funds are finding opportunities in
this space and in fixing broken capital structures.
Compounding the complexity and cost of regulatory compliance
More interesting, however, is the moderately growing secondary
is pressure from limited partners and potential investors for fund
trading market for positions in closed-ended funds, which, while
managers to lower management fees. Although these fees are in
still small compared to the size of the whole global real estate fund
place to cover a fund manager’s operating and administrative costs,
market, last year amounted to approximately US$2.2 billion. This
some managers are being forced to charge lower rates than they
trend has been sparked by limited partners selling their positions in
have in recent years in order to hold on to existing mandates and
funds raised at the height of the market — those that still have term
compete for new business. Investors generally want management
left but are facing losses on asset valuation. In response, investors
fees to cover overhead costs and understand the need to maintain
focused on opportunistic plays are buying in. The process of vetting
effective operations, but do not want management fees to be a
replacement investors and completing the trade can be highly
complex, and as yet, there is no formally agreed upon method for
valuing units or partnership interests. Nevertheless, this option
affords investors some degree of reassurance, especially those
otherwise wary of fund structures.
In general, real estate funds hoping to do more than merely endure
this period of industry turbulence, which has been underway
for several years, will have to continue to be creative in their
approach to the evolving environment. Fund managers will need
to be proactive about asset management, capital expenditures
and leasing for individual properties rather than holding out for
improvement in the overall macroeconomy. Within their own
organizations, attracting, developing and retaining talent will be a
critical issue going forward.
Consolidation in the fund sector may be necessary to improve the
overall quality of the market, but contraction poses a risk to the
people side of the business. Five to seven years ago, real estate
private equity was able to attract a considerable influx of bright
young talent because of the challenging work and attractive
remuneration it offered. The last several years, though, have seen
many role changes in the sector, all the way to the senior level.
How firms attract and retain talent will vary based on their size
and market position. Large global brands have both reputations
and recruitment processes that afford them a strong competitive
advantage over smaller companies. Historically, smaller fund
managers have been able to compete by providing close-up
transactional experience early on in a recruit’s career. With
continuing consolidation in the market, however, the future
quality of the industry’s talent will depend on how funds
approach professional development and foster creativity. With
capital at a third of what it was a few years ago, platforms are
now managing what they have — reduced deal teams in tandem
with a lower transaction market — but are also looking forward
to potential growth on the horizon. If transactions start to pick
up next year, followed by greater fund-raising, the increased
opportunities may require the mega-funds to compete more
actively for talent.
Real estate capital markets
In facing tighter lending constraints from the banks, international investors are finding it challenging to
match targeted returns.
The biggest issue yet to be resolved in the real estate capital markets First-tier markets in other parts of Europe, mainly France and
is lack of liquidity in the debt markets. In Europe, some large banks Germany, are also seeing a flood of capital pursuing deals across
have taken steps to exit international real estate lending altogether. all forms of commercial and residential real estate. Most of this is
When factored in with the many others that have been winding coming from the Middle East and Asia along with high net worth
down their portfolios or have stopped lending in the international individuals in troubled European markets who are concerned with
real estate markets, the availability of bank financing is extremely wealth preservation.
limited. Banks continue to offer balance sheet lending but have been
North American investors, on the other hand, are less engaged in
highly selective about new loan originations and select borrowers
primary European markets, finding opportunity in major US gateway
with whom they already have long-standing relationships. In addition
cities, as well as a few secondary markets showing signs of growth.
to bank balance sheet lending, the commercial mortgage-backed
Some of these are Orlando, Florida; Austin and Houston, Texas;
securities (CMBS) market in Europe ground to a halt some time ago,
Raleigh, North Carolina; and even hard-hit Phoenix, Arizona. Higher
and in the US, it has only had a modest return to a fraction of where
yields are possible insofar as the market dynamics are stable,
it was in the peak years.
oversupply is limited and there are solid prospects for near-term
growth. Achieving returns in these areas, however, requires in-depth
What strategy (ies) in 2013 will be the most lucrative for understanding of the market fundamentals and selective investments
deploying capital in 2013 (choose all that apply)? with partners that can actively manage the individual assets.
Development Distress, distress, distress
38.5% The distressed markets in Europe and the United States have seen
Bank portfolios a number of trades but are still below desired volume. There will still
44.6% be opportunities for distressed funds on the horizon, however. While
Government portfolios most of the major US banks have worked through their heavy risk
exposure, having been relatively successful at restructuring loans
the resulting and a few managing to refinance at par, regional and local banks are
transactions 56.9% still facing difficulty working out construction and development loans
Emerging markets on their books. Also, in Europe, most banks still cannot afford to take
losses on their books in spite of their intent to exit international real
estate markets. Continued market volatility has further delayed their
ability to begin working through their portfolios.
44.6% The UK is an exception as banks have been aggressively trying
0% 10% 20% 30% 40% 50% 60% to deleverage. Large portfolio sales of below core-grade assets in
Source: Ernst & Young LLP secondary and tertiary markets have been successful at attracting
buyers pursuing a loan-to-own strategy, particularly the large
Two-tier market global private equity funds. By contrast, in Spain, most of the
Across North America and particularly in Europe, the story remains distressed opportunity funds are chasing either preferred equity or
a tale of the haves and have nots. The gateway cities, including mezzanine debt where there is still some security. Even these are
New York, Washington D.C., San Francisco, London and Paris highly structured deals.
are active real estate markets with a large amount of interested There will be additional distressed opportunities from upcoming
institutional capital. The amount of institutional and foreign capital CMBS maturities as well, since many of the assets have not received
chasing opportunities in London has reached record levels and has the capital investment required to retain and attract tenants. Loans
driven yield for prime assets below peak rates. This has reopened in European CMBS programs will face particular difficulty getting
bank financing for a small number of prime properties, although restructured or sold prior to maturity, as they will in the UK. One
the loan-to-value ratio is generally being capped at about 60%.
of the biggest barriers to working out loans in the UK’s CMBS commitments from sovereign wealth funds and major institutional
programs concerns the swaps that were written to extend additional investors worldwide, investors are still hesitant to participate in
financing to borrowers as these swaps sit senior to the loans commingled funds. In the near term, investment managers will likely
themselves. continue the trend of the last 18 months of working individually
with investors on one-off deals.
Opportunities in the debt markets
It is not all a bleak picture. Lack of liquidity from the banks has
What are the key challenges you are seeing from limited
made room for nontraditional lenders and insurance companies in
partners (LPs) to get into a first close (choose all that apply)?
the senior loan market. While insurance companies have a history
as long-term lenders in the US, they are increasingly emerging as
an alternative to bank lending in Europe as well. Naturally, they are
deal terms/fees 54.0%
more risk-averse, extending loans for the highest-quality assets and
Requirement of greater
only within the 50%–65% loan-to-value range. due diligence 52.4%
In Europe, senior debt funds have emerged as an antidote to the Meeting regulatory compliance
lack of available lending from banks. Although this will fall far short requirements 14.3%
of compensating for bank financing, it opens the opportunity for Lack of track
North American, Middle Eastern and Asian investors to achieve record 38.1%
reasonable returns in less-risky European markets like London No difﬁculty in fund-raising
and Paris, where pricing for prime real estate assets is highly
competitive. However, their resources are also finite and not
sufficient to replace CMBS. 0% 10% 20% 30% 40% 50% 60%
Further, there has been a modest recovery in the CMBS market in Source: Ernst & Young LLP
the US: it is running at roughly one-tenth of peak volume. Some
of the major banks are hitting the market with new issuances, Spotlight on Asia
including JP Morgan, Deutsche Bank and Goldman Sachs; however, The Asian real estate picture varies starkly from that of North
as it stands, current volume will be unable to match upcoming America and Europe. Although the situation in Europe has made
maturities. In addition, much of the new CMBS origination will fund a number of LPs hesitant to pull the trigger on new transactions,
old issuances. there is a lot of capital available in the market.
The market for new CMBS issuances in Europe will not likely unlock China is one of the few Asian markets where there appears to be
in the near future. Nevertheless, much of Europe’s real estate deal tremendous opportunity for debt funds to achieve mezzanine
flow touches the CMBS space, either through equity injections or debt- and distressed-level returns. Due to tightened Government
restructurings. This will likely continue, given the billions set to regulations on banks, bank lending for the development sector
mature over the next five to seven years. Although not all will be has become extremely difficult to secure, driving many small to
restructured, many that are will take significant write-offs. medium-sized developers to offshore debt providers. Still, a number
Investors are still finding opportunities in Europe’s bond market, of funds actively sourcing the pipeline in China are still waiting
which is active. Because of the high level of volatility, however, they for market clarity before giving the green light as there is some
are being extremely cautious, particularly in the more hard-hit expectation that prices might drop further.
markets, such as Spain. Such high returns are otherwise not prevalent in the Asian markets
because of low interest rates, low cap rates and firm asset pricing.
Ongoing challenges Since the market crash in the late 1990s, banks have limited
Fund-raising will continue to pose a challenge for first-time funds. exposure to real estate but are readily lending because of the
Outside of the large, global US-based funds that continue to see
Global market outlook: Trends in real estate private equity 5
continued GDP growth in most Asian countries. The availability Beyond China, Vietnam may be another location that offers
of cheap bank financing has effectively eliminated the market for distressed-level returns; however, executing and closing these sorts
mezzanine-debt providers, leaving development risk as one of the of transactions are quite challenging due to regulatory challenges
only options for funds targeting returns above 20%. This is true on titles and price gaps.
even in Indonesia, which has historically had high interest rates.
Whereas several years ago, rates stood at about 14%, they have Deal flow
now dropped to 6%. With regard to overall deal flow, the Asian markets, particularly
Singapore and Malaysia, are active. Singapore, looking to
position itself as a gateway market like Hong Kong, has been
Single-family fund formation successful at attracting core investors looking for office,
In the US, sustained growth will be slow to take root, hospitality and other commercial properties. Malaysia still
particularly as one of the main historical recovery primarily draws in value and opportunity funds, as do Thailand
drivers — housing — is still in a bumpy, bottoming-out and Indonesia.
phase. However, the private equity real estate fund Among the most active international players in the Asian real
sector appears to be an early mover in spurring deal estate markets are the global US-based real estate funds. In
flow in the single-family home market. It is hoped spite of high investor interest, the number of transactions being
that this will prove a recovery catalyst in this space completed by real estate funds in Asia has slowed, owing to
and thus, offer a boost to the growth trajectory in impact from the crisis in Europe. Growth in asset pricing has also
the broader economy. slowed to between 2% and 5% on average, compared with 7% to
Already, several major fund managers have 10% several years ago.
announced roughly US$2 billion in dedicated rent-
to-own funds for the single-family housing sector.
The strategy, which involves building a portfolio
of distressed homes and managing them as rental
properties short term, is not without considerable Project Utrecht, the Netherlands
complications. By pulling excess supply off the
In April 2012, Ernst & Young played an advisory role in
market and providing a much-needed solution to
resolving the first European CMBS final note maturity, which
credit-constrained consumers, rent-to-own has
involved a portfolio of more than 200 office and industrial
the potential to make a sizable economic impact.
properties owned across the Netherlands. Last valued at
Already, some of the hardest-hit housing markets in
€627 million (US$808 million) in 2011, the portfolio holding
the US, like Phoenix, Arizona, are seeing the effect
company was acquired by a joint-venture structure through
of this approach, with less than two months’ supply
a loan-to-own strategy in a credit-backed bid transaction
of homes on the market.
amounting to about €360 million (US$464 million). The
joint venture injected a significant amount of new equity,
Do you expect to develop a single-family residential and nearly €215 million (US$277 million) in new bonds were
investment strategy? issued, backed by the assets in the portfolio.
The original acquisition in 2005 initially comprised 321
Maybe Yes properties financed with €1.3 billion (US$1.7 billion) of debt,
18.7% 18.8% €1 billion (US$1.3 billion) of which was securitized in four
tranches. The debt matured in February 2010, at which point
€765 million (US$986 million) was still outstanding. The
arrangement was both creative and attractive, particularly
given the ongoing constraint of the debt markets and the
No length of time that had passed since the initial maturity date.
Source: Ernst & Young LLP
Sovereign wealth funds’ influence in the industry
For cross-border real estate investment, London is by far the Without major investors like SWFs engaging in the fund-raising
biggest global market (year-to-date: London, US$17 billion; process, fund managers have been forcibly opening up to separate
Paris, US$5.6 billion, New York, US$3.5 billion, according to accounts to stay in business and remain competitive. These
Real Capital Analytics), and interest from sovereign wealth funds agreements frequently mean lower fees for them, but for the
(SWFs) is certainly helping the city to prolong that status. Capital SWFs, channeling capital into the market this way offers many of
is converging on the London real estate scene from across the the same benefits as investing directly, in terms of decision-making
globe, for example, from the Norwegian, Korean, Malaysian and control and liquidity, while affording them local market knowledge,
Qatari sovereign wealth funds, to name a few. Historically, these investment advice and asset management. In other words, there
entities have favored international gateway cities, though with are good incentives for SWFs to continue participating in the market
mainland Europe embroiled in a deep financial crisis, London is this way, from which real estate fund managers will surely see long-
attracting even more attention from SWFs than usual. term benefits.
And there is good news for smaller real estate fund managers: it
If you are working with sovereign wealth funds (SWFs), appears there is space in this market segment for large and small
what vehicles are you using? firms alike to attract business from SWFs. It seems likely that the
fund managers they gravitate to will be those with an established
(please specify) Commingled
reputation and relationship with the SWFs. Most new funds will
have a difficult time attracting SWFs, as they currently do with
Separate other major institutional investors in spite of being free from
legacy issues. It will also depend on the funds’ understanding of
the SWFs’ highly individualized investment preferences. Although
Not working 11.9% SWFs are cautious about investment risk, they nevertheless have
47.5% different objectives, especially when investing outside of their
of the above
own jurisdictions. Many with a large amount of capital tied up in
JV’s 20.3% domestic assets look to London and other gateway cities for secure
markets in which to diversify their real estate portfolios. Some aim
for core-level returns and some for higher returns, while others
Other (please specify) Source: Ernst & Young LLP seek wealth preservation and still others look for opportunities to
Not working with SWFs
permanently place capital.
Changing the real estate
Combination of the above
Furthermore, fund managers who can cater to specific
requirements besides asset investment and management will be
funds’ game JV’s best positioned to attract and retain business from SWFs. The
If SWFs’ focus on London is giving London-based fund managers Sovereign Immunity Exemption from taxation is a prime example.
a slight boost over their counterparts in other markets, how SWFs In a number of jurisdictions, SWFs are exempt from taxes on real
are investing is also having an impact on the sector across the
Commingled funds estate investments, but putting a fund structure in the middle could
board. In addition to direct investments, many SWFs continue to adversely affect their ability to achieve sovereign immunity on
choose funds as a channel for placing capital. But consistent with underlying asset returns. Each one also has a different transparency
the global trend, most are opting for separate accounts with fund and disclosure culture.
managers, rather than the blind pool arrangements so common
Overall, in the current fund-raising environment, funds’
before the financial crisis. In part, many continue to prefer the
attractiveness to SWFs and other large investors will depend on
control and focus to the non-discretionary nature of commingled
their ability to accommodate individual investment preferences and
funds, but many also have more capital to place than today’s
to work on more flexible terms.
fund-raising climate can accommodate. In addition, they may have
a longer-term outlook and desire to hold properties for a period
that is more suited to JV structures.
Global market outlook: Trends in real estate private equity 7
Key considerations to maximize
• Scale and efficient operations
• Investor and bank preference for lower gearing
• Lack of liquidity; banks remain cautious
• Explicit debt and hedging strategy
• High cost of debt
• Alternative forms of debt financing
• Short debt-term period; creates refinancing risk
• Fund-raising: in-house vs. placement agent
• Track record
• Investor relationships
Operational efficiency and performance improvement
The real estate fund sector is rapidly changing how it thinks about operational efficiency and cost
controls. At the height of the market, most real estate private equity organizations were primarily
focused on deal flow and business development. Given downward pressure on fees, new demands
from institutional investors and increased regulation, back-office effectiveness and cost reduction have
become a higher priority.
Regulatory influence and industry trends In terms of mid-office activity, AIFMD compliance will mean
mapping and boosting formalized practices, such as reporting of
driving change key risk areas, including investment, operational and credit risk.
For some time, investors have been demanding better operational Additionally, liquidity management will have to be tracked and
performance of the managers of their real estate assets and reported to regulators more rigorously. The same is true under
governance over their capital. Heightened regulatory requirements the Dodd-Frank regulation through Form PF. Understanding what
across the US and Europe are now providing a catalyst for this is required to meet compliance criteria may in fact be the least
change to occur. Both the European Securities and Markets challenging aspect of the planning exercise for businesses. The
Authority’s Alternative Investment Fund Manager’s Directive hope is that implementing this level of oversight will make fund-
(AIFMD) and the US’s Dodd-Frank Act will affect asset managers raising easier by attracting a wider range of investors to alternative
wanting to tap institutional investors for fund-raising. And while the funds, just as the Undertakings for Collective Investment in
jury is out as to the impact of regulatory requirements on actually Transferable Securities (UCITS) regulation did for public funds
contributing to improved operational effectiveness and efficiency, targeting retail investors across Europe.
some organizations have embraced the new requirements in pursuit
of a broader operational agenda. In parallel with the implementation How have the costs associated with compliance under the new
of new regulations, institutional investors are ramping up their regulatory regimes impacted your operational effectiveness
campaign to bring further transparency to the industry. At the (resource time) and margins (profitability)?
same time, fee pressures are causing real estate managers to look
for ways to drive down their underlying cost base. With all of these Signiﬁcantly — increase
in operating costs
catalysts for change, sooner or later, all managers will be forced to by more than 10%
act. Those who act in the present are setting the bar for the industry.
And if done effectively, the result will be a more efficient business
that will help these real estate managers to better align their 9.8%
overhead and improve scalability for the future. In the process, they Moderately —
Don’t know —
will meet, or even exceed, the demands of the investor community. have not calculated
37.7% costs between
Naturally, the task of choosing a new platform will be influenced 5% and 10%
by how individual fund managers operate in today’s environment. 23.0%
Because the current model highly favors localization, many real Minimally — increase
estate fund managers are based in multiple jurisdictions with in operating costs of
less than 5%
different asset management teams, back-office systems and service 29.5% Source: Ernst & Young LLP
providers in each. Whether they choose to restructure to a highly
centralized model, where there is a heavy centralization of processes
and controls across all funds, to a hub-and-spoke model, where
there is consistency but less centralization, or to a product-specific
Outsourcing and offshoring
distributed model will therefore be based on a number of key Alongside regulatory reforms, cost control will be another major
considerations. Much of the driver will be cultural, but other factors, item on the agenda for funds revising their mid- and back-office
such as tax and bookkeeping requirements across jurisdictions, will functions. With still relatively few market transactions and growing
be important, as will staff mobility. Additionally, key investors may pressure from limited partners and potential investors to reduce
express a strong preference for a particular approach over another. management fees, funds are finding they must power the same
Global market outlook: Trends in real estate private equity 9
business operations with less. This has had a notable impact on The real estate fund sector is only in the preliminary phase of
what solutions the sector is devising for trimming back-office costs. realizing the full cost-reduction benefits of outsourcing and
offshoring. Still, many fund managers have already found it
easier to prove and pass through these outsourcing costs to
If you outsource or are looking to outsource your back- and
limited partners. To be sure, not all processes lend themselves to
middle-office functions, what are the key areas you are
outsourcing. Generally, those processes that are more “strategic”
focusing on (choose all that apply?)
in nature and involve complex analytics or judgment are less suited
Asset management to the outsourcing model. These more strategic processes often sit
within the portfolio and asset management or transactions arenas.
Property Conversely, those processes that are highly repeatable are more
congruent with the outsourcing model. These processes often sit
within the accounting or operations areas. Organizations that do
move down the outsourcing path quickly realize that even those
4.7% highly repeatable processes cannot be outsourced in their entirety,
as a management and control element must be retained in-house.
Fund administration and
investor reporting 37.2% Therefore, organizations with larger scale often find themselves
better able to realize cost savings associated with outsourcing.
Factors of size, scale and market
11.6% While outsourcing and offshoring are on the rise, it has mostly
0% 10% 20% 30% 40% 50% 60%
been multi-billion dollar fund managers setting this trend. Smaller
Source: Ernst & Young LLP
players are instead leaning toward boutique service providers
to supplement their mid- and back-office management staff. A
One rapidly growing trend is the use of new real estate software to few large open-ended funds are beginning to explore this space;
help improve operational efficiency. However, given the relatively however, it is still in a very early stage.
small number of vendors well suited to address companies’ issues
In all, attention to improving mid- and back-office functions has
surrounding operational efficiency, combined with consolidation in
gained considerable momentum on a global scale among real estate
the marketplace, some vendors are having difficulty satisfying the
fund managers in the last five years, and-this fast-paced change will
increase in demand for their products. This is driving a trend toward
likely continue over the next several years as regulatory pressures,
the use of implementation teams from larger service providers.
investors and cost drivers demand it.
Also, larger fund managers are increasingly exploring options
for full-scale back-office and fund administration outsourcing,
particularly in light of the compliance measures needed for the Risks for real estate funds
AIFMD and Dodd-Frank regulation. Fund administration service
providers are struggling to build an infrastructure that meets their
clients’ demands, as the real estate sector has not been a major
focus in the past. Some have managed to devise intermediary
hybrid schemes by tying together pieces of solutions used for other Optimizing tax
industries, but to serve the real estate industry effectively, there will
need to be a pure-play real estate platform. Optimizing capital of legal entities in the
structure fund structure
The practice of offshoring business functions to lower cost centers Access to global
capital sources New regulations and
is also gaining traction in the funds world. Lease abstracting, for reporting requirements
example, is becoming a more commoditized process and is being
delegated with growing frequency to firms in India and Eastern Source deal flow
Retaining LPs and
Europe. The most important consideration is ensuring that these attracting new LPs
processes can be tied in with a firm’s own control systems, but Best in class
to the extent that firms have been able to do this correctly, the infrastructure — middle
and back office
industry has responded very positively to offshoring, especially
Alignment of fund design
with LP strategies and Human capital —
when cost savings opportunities exist through labor arbitrage. objectives competition for talent
Source: Ernst & Young LLP
Regulations across the financial services sectors will have a substantial impact on available capital
in the real estate fund sector globally while both the United States and Europe are enacting stricter
enforcement on alternative investment funds specifically.
Europe: AIFMD Level 2 US: Dodd-Frank
Of the large-scale financial regulatory measures being introduced The second large-scale regulatory measure affecting the funds
around the world, two major pieces of legislation target alternative sector is the Dodd-Frank Act in the US. Like the AIFMD, the Act
investment funds directly. In Europe, the sector is gearing up for requires many fund managers to register with the Securities and
the second phase of the AIFMD. The directive’s aim is to bring Exchange Commission (SEC) for oversight and review. One of the
regulation of the alternative investment fund (AIF) arena into line key challenges for fund managers, however, has been determining
with current regulation for public funds by improving transparency which ones are required to register. There is still a great deal of
in the sector’s risk management practices and establishing a uncertainty around this point, and until the SEC offers more clarity,
standardized set of rules across the EU member states. It will take it is likely that many may go through the process unnecessarily. The
effect in July 2013 and will impact all alternative investment funds, key question is whether real estate, under the Investment Company
including real estate funds. Act of 1940, is considered a security or not.
Although only AIF managers will be directly affected by the
directive, in the preparation phase, asset managers will need to How have you prepared for an SEC exam as a registered
review which of their funds must be authorized. Most funds based in investment advisor (choose all that apply)?
Europe and all fund managers marketing to European institutional
investors will fall within the scope of the new directive while some Review of standard
documentation request 26.3%
established funds that are no longer actively investing or marketing
could be excluded under a “grandfather” provision. Mock interviews
One of the most critical pieces in complying with the AIFMD,
however, will be proving that appointed AIFMs are materially active Review of select compliance
policies and procedures 33.3%
in fulfilling the portfolio and risk management functions of the
fund. Because the directive embraces a broad definition of risk Limited compliance testing
management, which includes investment risk, compliance and 21.1%
operations, fund managers must be extremely mindful of how We have not prepared
extensively they delegate roles to outside parties. In addition, for an SEC exam 47.4%
liquidity management will continue to be another area requiring
Other (please specify)
significant attention from AIFMs as the directive requires very 14.0%
robust and formalized liquidity reporting practices for investors.
0% 10% 20% 30% 40% 50%
Despite the intense business strategy and planning Source: Ernst & Young LLP
considerations necessary for AIFMD compliance, the directive will
ultimately make it easier for alternative investment managers Part of the difficulty is that real estate fund oversight is still very
to build scalable, more efficient pan-European platforms. Also, new to the SEC, meaning it could still take time to establish the
because of global recognition of the Undertakings for Collective specifics concerning which fund managers should be reviewed and
Investment in Transferable Securities (UCITS) regulatory what the focus of these reviews will be. Indeed, the first round of
standards that cover public funds, having similarly rigorous reviews will probably serve primarily as an information-gathering
requirements for the AIF sector will make them more attractive effort for the SEC, shedding light on how funds approach and
to investors on a global level. document investment valuation, for example.
Regardless of whether one is required to register or how official
reviews take shape, fund managers would be well served by
beginning to assess their operations in the context of the
Global market outlook: Trends in real estate private equity 11
Dodd-Frank requirements as these will likely evolve into industry
standards. Over time, a fund manager’s ability to attract investors
could hinge on whether it has the same processes and controls in
place as fund managers under SEC oversight.
For the time being, however, advisors that are registered will be
facing a looming deadline to file a Form PF, which deals with risk-
profile information. Larger advisors were generally the first in line
to file, with many having to meet deadlines in the second half of
the year. Although the process itself is very basic once in place,
determining which information must be included is not entirely
straightforward and will require advance preparation.
Indirect regulatory impact
Beyond AIFMD and Dodd-Frank, there are parts of other new
financial regulations that will have an indirect effect on the real
estate fund sector, and some will have global reach. Basel III, for
example, could greatly influence how much capital banks pour into
the sector because of the significantly steeper capital requirements
it imposes on banks.
In the EU, Solvency II could mitigate a portion of the potential
capital reductions brought on by Basel III. Geared toward the
insurance market, Solvency II will enforce stricter risk criteria for the
assets insurance companies invest in. This will naturally affect how
real estate funds report to insurance companies because insurers
will require more detailed information from their asset managers.
Improving transparency could also encourage European insurers to
lend more to the real estate markets.
Tax design and structuring issues for
In the past five years, tax planning and compliance have become a growing concern for real estate
private equity funds. In part, as funds become more institutionalized, more and more of their investor
base is demanding it, but jurisdictional changes are also having an impact.
New developments in Europe Precautionary measures
As capital moves between jurisdictions and cross-border investment A more widespread issue for funds’ tax planning is the increasing
leads to taxation of the offshore investor, the way it does in the US frequency of auditing across many jurisdictions, particularly those
and could more often in parts of Europe, careful tax planning gains facing financial pressure. This trend could ultimately affect how
greater significance. deals are structured among other things. Whereas tax authorities
are very familiar with the common deal structures conceived five to
One of the key places to watch will be Germany, which in April
six years ago, they did not pursue auditing as aggressively before
signed a new double-taxation treaty with Luxembourg affecting
the financial crisis. Now, although deal structures have not yet
how Luxembourg-based private equity funds are taxed on German
changed radically, fund managers are more aware of the particulars
investments. Luxembourg’s treaty networks with the rest of
tax authorities are likely to scrutinize and are becoming more
Europe make it a preferred choice for resident jurisdiction of
focused on day-to-day compliance. In a few cases, entities have
European funds. However, the revised treaty would allow Germany
begun outsourcing their internal tax departments to specialist firms
to tax investors on capital gains earned when exiting a real estate
to streamline the administrative process while ensuring their tax
company in cases where more than 50% of its assets are German-
planning meets all jurisdictional requirements.
based. Because German national law has not yet been amended to
reflect these changes, this has not had a significant impact on tax Changing tendencies in fund structures, such as the number of
leakage so far. Yet there are questions in the market around what open versus closed-ended funds being raised, will also mean new
current tax structures will be fit for the future. tax considerations for funds. Already, investors’ preference for
open-ended funds has taken hold in the US in response to post-crisis
There have also been questions as to whether there could be a
demand for greater liquidity options. Because of the in-and-outflow
coordinated approach across Europe to follow Germany’s example.
of investments, open-ended funds are also more complex from the
Without wide-scale amendments to national laws, though, changes
tax perspective than standard closed-ended funds.
to tax treaties would not have a significant impact either on how
funds are formed or on what their long-term exit strategies are.
Also, given the financial environment in Europe, implementing a
Market risks versus tax risks
In general, while there are a number of economic factors influencing
fully taxed corporate share deal may allow for additional revenue
where and how investors place capital, tax practices do not heavily
generation, but it could also put any country that implements such a
influence them. Whereas real estate investment in the emerging
scheme at a competitive disadvantage in attracting foreign investors.
markets and in southern and central European markets accelerated
US tax environment considerably in the run-up to the financial crisis, investment streams
now favor traditionally conservative markets, such as the US and
Compared with the US, however, Europe still remains a more
northern Europe, because of investor concerns over market risks, not
friendly tax environment to foreign investors interested in the
tax revenue. Although these markets may require more intense tax
real estate markets because, unlike the US, it does not enforce
planning, investors are comfortable with the relative stability of the
special taxation rules on real estate holding companies. Heavy
property markets in New York, London and Paris, for example, and
lobbying efforts are underway in the US to encourage more foreign
feel confident about how they underwrite their exit strategies there.
investment in real estate by urging legislators to scale back offshore
investors’ tax burden upon exiting a real estate entity. At the same Fund managers have been pursuing more tax planning for some
time, today’s environment still requires careful planning for offshore jurisdictions in the Far East, however, especially large global funds
investors to meet tax requirements while continuing to maximize and Australia-based funds that are more heavily invested in the Asian
their capital gains. (The one exception is sovereign wealth funds, markets. The practice has not reached the same level of sophistication
which are permitted special exemptions.) or detail as in the US and Europe at this stage, since many funds are
still charting or refining their overall market-entry strategies.
Global market outlook: Trends in real estate private equity 13
Key tax considerations for real UK
The UK proposes to introduce legislation to counter tax avoidance
estate funds in relation to high-value residential property transactions. The
consultation process on the provisions and their impacts is currently
occurring, but in brief, there are three proposed changes to the tax
• Funds often have complex cross-promote and clawback
rules that are likely to be of relevance to real estate funds investing
structures that must be closely analyzed to ensure that the
in residential projects.
structures do not cause the desired tax treatment to be subject
to re-characterization. 1. A Stamp Duty Land Tax (SDLT) charge of 15% is to be applied to
all acquisitions of residential property over £2 million
• Blocker corporations continue to be used extensively across the
(US$3.2 million) where the acquirer is a “non-natural person.”
globe. There is increasing pressure with respect to the amount
There is a proposal for an exemption from this higher rate,
of debt that can be incurred by such corporations.
however, for property developers that acquire such property in
• A number of issues have emerged regarding the implementation the course of bona fide property development business.
of default procedures found in many fund agreements. Many
2. An annual SDLT charge equivalent to 0.3%–0.75% of the
fund sponsors are reexamining these provisions to ensure they
property value (but initially capped at a maximum of £140,000
fully understand how the procedures will work in the case of
(US$224,928) is proposed for property over £2 million
future defaults by investors.
(US$3.2 million) held by non-natural persons. For the annual
• Real estate funds have been and will increasingly be subject to charge, non-natural persons will mean companies and
tax audits as taxing authorities look for additional tax revenues. other corporate entities, collective investment vehicles and
partnerships that include one or more such entities. Trustees are
not included in the charge.
3. Capital gains tax will be levied on sale of residential property
If you have had a tax audit, was it at the fund-vehicle level or over £2 million (US$3.2 million) where the property is held
at the real estate asset-holding-vehicle level? by a non-natural person. Previously, residential investment
property held by a non-UK resident special purpose vehicle
(SPV) was exempt from capital gains tax. The rate of tax
proposed is yet to be confirmed. For capital gains tax
Fund vehicle purposes, non-natural persons will include all those included in
18.2% the annual charge above, and, as part of the consultation, the
Government is considering which, if any, other entities should
39.4% be included in the definition (e.g., the charge could include
trustees, personal representatives and entities from other
Real Estate asset jurisdictions, such as foundations).
holding vehicle level
42.4% Besides the above real estate-specific tax avoidance arrangements,
there are proposals to introduce a general anti-avoidance rule
Source: Ernst & Young LLP (GAAR). The GAAR would be one strand in Her Majesty’s Revenue
& Customs (HMRC)’s approach to tackling avoidance. It would
not affect HMRC’s right or ability to challenge in the normal way
arrangements it considers ineffective in achieving a tax avoidance
The scope of GAAR is expected to apply to several taxes, including
income tax, corporation tax, capital gains tax, SDLT and the
property annual charge referred to above.
What were the areas of focus for the tax audit?
Both residence being
Source: Ernst & Young LLP
• US funds are increasingly using REITs in their structures
to accommodate certain investors, including (i) non-US
pensions, SWFs and high net worth individuals (to minimize
US Foreign Investment in Real Property taxes); and (ii) US
foundations and other US exempt organizations that do not
qualify for tax-exempt treatment on debt-financed income.
• In the US, there is a huge push on the part of public
and private groups to qualify their businesses as REITs
because of the favorable pricing and valuations REITs are
Real estate activity in the emerging markets of Brazil,
Russia, India and China (BRIC) has not been immune
to challenges in the global economy. The retreat of
European funds has been felt throughout the BRIC
nations. The recent slowdown of foreign capital chasing
deals in these markets can primarily be attributed to the
perceived level of risk.
Real estate experts in each market agree that risk
perception among investors is highly dependent on the
level of the investor’s market familiarity. Local investors
often end up with the competitive edge on new deals
because they appear to have higher risk appetites while
the reality may be that they are more comfortable
with otherwise “risky” assumptions on account of a
better understanding of their home markets. Foreign
investors that have continued to have success in finding
opportunities with returns between 20% and 30% either
have a long-standing presence in those markets or have
been diligent in their choice of local partners.
In spite of this common theme, the BRIC nations have
very individualized market dynamics and drivers. Key
real estate trends and issues in each of these nations are
discussed in the following sections.
What region(s) are you most focused on for exposure
to emerging markets (choose all that apply)?
Not focused on
emerging markets 61.3%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Source: Ernst & Young LLP
• The weak global economy has started to affect Brazil. Its economy grew only 0.75% in 1Q12.
Yet inflation and unemployment are both falling.
• Sales of trophy assets drove average prices for retail and office properties to multiyear highs.
• Transaction activity has picked up in Brazil’s secondary markets, where development is meeting
the needs of a growing consumer class in previously underserved markets.
Source: Real Capital Analytics, Prudential Real Estate Investors
Brazil continues to attract substantial interest from real estate
private equity funds based within and outside the country.
An estimated US$3 billion has been raised by these funds for
investment in Brazilian real estate. In spite of the market’s strong
growth potential, however, deployment of this capital has slowed
down because of the crisis in Europe and its impact on the global
economy as a whole. Since most of these funds have a fairly long
investment timeline — typically 7 to 10 years — investors feel they
can afford to be selective with investment opportunities.
With Brazil’s emerging market status, many funds focused
on Brazilian real estate continue to target returns between
20% and 30% although there are fewer projects able to
match these rates than there were two to three years ago.
Most that fall within this range are ground-up development
projects. Foreign funds, in particular, may face difficulty
establishing whether a project’s assumptions are reasonable
without partnering with local real estate experts or
hiring independent advisors and engineers to supervise
Corporate office properties remain the primary focus
because of the high demand for office space and extremely
low vacancy rates. In prime office areas of São Paulo, for
example, empty office space is roughly 0.5%–1% of total
inventory. Business hotels are also in high demand by
investors, particularly in São Paulo, Rio de Janeiro and
Recife, and so are residential developments, owing to
Brazil’s growing middle class and rising number of first-time
Many funds are increasingly focused on the Brazilian real
estate derivatives market, either on the receivables end,
which is proving a stable source of income for many, or by
listing assets on the stock market. As that market has grown
more sophisticated, it has become a popular market entry
point for smaller investors.
Global market outlook: Trends in real estate private equity 17
• Russia has withstood the challenging global economic conditions. The International Monetary Fund
has forecast GDP growth of 4% for both 2012 and 2013.
• The country’s relative economic stability and lack of investment-grade properties should support asset prices.
• Observers note that investors may favor Russia in the near term because pricing has been stable
there and the market appears to have the ability to recover quickly once systemic risks abate.
Source: Real Capital Analytics, FTI Consulting
In the Russian real estate markets, the tide has shifted from last
year, which was the country’s most active year for investment and
deal flow. Highly liquid at-home investors have remained engaged
in the market, but deployment of foreign capital has slowed,
outside of a few trophy office and retail sales, where competition
from less risk-averse local investors is fierce.
The retreat of European investors has been felt more acutely
in Russia than in other emerging markets because of its close
economic ties to Europe. Furthermore, North American, Middle
Eastern and Asian investors are less familiar with Russian real
estate and have historically provided a very small share of total
The debt markets in Russia remain liquid relative to other global
markets even though many international banks have withdrawn
to address problems in their own domestic markets. Russian
banks are continuing to lend on transactions and development
projects in spite of their high exposure to real estate. Interest rates
remain relatively high, however. Foreign banks that have remained
engaged in the Russian real estate market often offer cheaper
capital than domestic lenders do. Mezzanine debt funds have not
managed to take off in Russia as sophisticated capital structures
are uncommon in real estate transactions.
Over the long term, real estate players in Russia should expect to
see considerable market growth beyond Moscow. The Government
is kicking off a number of significant development initiatives in the
regions, particularly around the Black Sea in advance of the 2014
Winter Olympics, and the northern Caucasus. While the plans
are in the early stages, the goal of attracting investors to these
areas means that both system and market transparency will likely
• Massive urbanization, strong local demand and a thriving economy have all been driving a strong
commercial real estate sector in India over the past several years.
• Banks are lowering their exposure to real estate so developers must obtain financing from
• India has favorable demographics for real estate investment that are attracting foreign investors: a large
labor force, a young population and a growing middle class with greater amounts of spending power.
Source: Real Capital Analytics, DTZ
India’s real estate markets are currently in a state of transition. for retail. In addition, the bond market is fast maturing and is
Following the heavy influx of private equity funds focusing on new an increasingly popular means for institutional investors (both
real estate development projects from 2005 to 2007, the last foreign and domestic) to engage in the Indian real estate market.
couple of years have seen the slow, steady exit of that first wave The growth may be attributed to the preference of most local
of capital with the closing of the five- to six-year investment cycle. investors and developers for seeking lending partners over equity
Currently, a new set of investors are taking an interest in Indian real partners on deals.
estate with a focus on buying completed projects, last-mile funding
Despite this growth, significant challenges continue to face the real
and funding annuity assets. In the case of new development, funds
estate sector in India. The foremost challenge facing the sector
seem to be showing a preference for smaller projects, with their
today is the continued rise in prices (beginning in 2005 as a result
interest confined to five major cities: Delhi, Mumbai, Bengaluru,
of the Government’s market liberalization programs) even though
Chennai and Kolkata. Hotels have drawn significant attention from
investor interest has slowed as a result of the global economic
institutional capital as has urban residential, suggesting that new
crisis. Additionally, securing land for new projects remains a tedious
capital is taking a more focused approach to specific asset classes.
process since a vast majority of land is designated for agricultural
Most foreign investors (still a small part of the investor community use. Lastly, raising new funds has become more difficult. Many
in India) continue to partner with local developers and real estate investors have taken a wait-and-watch stance as they wait for
experts on deals. Most real estate activity in India continues to proof from the first major wave of real estate investment, which is
be conducted by individual investors as domestic institutions presently exiting the market.
are largely limited in their ability to invest in real estate due to
One of the fastest-growing segments is the residential mortgage
market (currently in a nascent state), owing to a growing middle
class population and rising average household income. The size
of this growing market has also had a positive impact on demand
Global market outlook: Trends in real estate private equity 19
• Economic growth decelerated in China over the past several months. Even so, analysts forecast a growth rate
just below 8% for 2012, much higher than any of the developed economies.
• Investment activity in the Asia-Pacific region has recently fallen as the global economy tries to right itself
and economic uncertainty subsides.
• The retail and office sectors are the best-performing property sectors.
• Increased urbanization and higher household incomes have led to a rapidly growing consumer class. This trend
is expected to continue and should boost values of investment-grade shopping centers.
Source: Real Capital Analytics, DTZ
Overall real estate fundamentals in China have remained
strong, though the gap between investor interest in residential
and commercial properties has widened as a result of recent
Government initiatives to stabilize property pricing. New
restrictive measures on bank financing have been especially hard
felt by residential developers and have heightened uncertainty on
the investor side.
The Government has also created new value opportunities for
debt funds. Since China is one of the few Asian markets where
investors can still achieve mezzanine debt- and distressed-level
returns, a number of offshore funds are moving to fill the lending
gap in China.
Policy measures for the commercial sector have been less
restrictive, which has fueled investor demand and driven cap rates
down. Demand for office properties remains concentrated within
China’s top-tier cities, but retail properties are attracting interest in
secondary and tertiary markets as urbanization trends continue.
In terms of total deal volume, more than 80% of real estate
transactions in China are still dominated by the local players.
This is partially a result of considerable restrictions on foreign
investment in real estate but also of high real estate taxes and
foreign investors’ difficulty in finding sophisticated local investors
to work with. While local partnerships are not a requirement for
foreign investors, they facilitate the process of navigating complex
regulations and local government processes.
Also, while Government initiatives have had an impact on capital
available from domestic lenders, there is no shortage of funds
investing in the real estate markets. This means that foreign
investors face heavy competition when trying to compete
independently on deals.
As the headlines so aptly and consistently remind us, persisting
For your next fund, do you expect to raise more or
volatility in the financial markets means that the real estate fund
less than your previous fund?
sector will continue to face some level of uncertainty for the
foreseeable future. This means it is not immune to the individual
symptoms that draw so much attention, and indeed, it will need
to become even more adept at adjusting to them. The solution is
not in treating these one-off shocks, however; the solution lies in same
focusing on long-term growth. 30.2%
Naturally, not all businesses will emerge on the other end of this 41.2%
transitional period unscathed. Difficulty fund-raising, increased
business costs and widespread market consolidation will continue Less
to claim casualties in the funds sector. But this corrective phase 28.6%
is necessary for the sector’s overall quality and credibility,
purging excessively risky and poorly run players from the market,
rewarding those able to bring creative solutions to the recovery Source: Ernst & Young LLP
process, and helping to rebuild investor confidence in the real
estate fund space over the long term.
Global market outlook: Trends in real estate private equity 21
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