Managing Risk In Commercial Real Estate Investment
As commercial real estate becomes an increasingly prominent part of institutional portfolios, attitudes towards risk management are evolving. From the multi-asset class context to the market, portfolio, asset and tenant level, investors are changing the way they look at real estate risk. The large body of literature has improved our understanding of real estate risk, but this is often poorly integrated into actual investment processes. Using MSCI’s unparalleled global dataset and risk models, this research paper focuses on several key areas important to the discussion around real estate risk.
Investor Forum: Cycle Protection
Rachel Fixsen – IPE Real Estate Magazine
With real estate prices and capital markets at a cyclical high, risk management is pertinent. Six leading investors – Standard Life Investments, Ohio SERS, Varma, AMP Capital, Redington and M&G Real Estate share their views on how to manage portfolio risk.
Risk Mitigation In Real Estate Portfolios
Commercial real estate has recovered strongly from the great financial crisis, but recent history compels us to be prepared for the inevitable vagaries of the market. There are no “bulletproof” deals, but portfolios can be monitored and managed for risk. Investors can try to insulate themselves from “known unknowns,” at least to a certain degree. Morgan Stanley look at different risk management tools and conclude risk management tools will not prevent the next downturn, any more than a sharper telescope can avert Halley’s Comet on its next approach to earth in 2061. Instead, risk management tools enable investors to survey the market and to be more aware of the fuzzy objects that may be headed their way.
The Asset Owner Real Estate Investment Process: Risk Management Insights From The MSCI/IPD Survey
Peter Hobbs, Bert Teuben, Neil Gilfedder and Zita Marossy – MSCI
During the final quarter of 2013, MSCI conducted a survey into the asset allocation processes of institutional asset owners, with a particularly close examination of their real estate exposures. This paper provides a more detailed analysis of the real estate element of the survey, with a particular focus on risk management through the investment process.