High Rise and Fall tells the story of how the European commercial property industry transformed from a local, small-scale business to an international, financially sophisticated, multi-billion-euro industry that was ultimately devastated by the 2008 crash.
Drawing on her experience as both former Editor of EuroProperty and Director at the European Association for Investors in Non-Listed Real Estate Vehicles (INREV), Andrea Carpenter explains how the mid-1990s saw the arrival of a new style of property investing in the European markets. Seeking high returns, impervious to risk and with a seeming indifference to the buildings at the heart of the deals, US players such as Morgan Stanley, Goldman Sachs and Lehman Brothers conquered the European property markets with an audacity that both repulsed and intoxicated the locals. Fuelled by improving economic conditions in the early 2000s, European investors were keen to emulate all or parts of the US investors’ philosophy. Armed with a wall of capital, the industry expanded into the far reaches of Europe in search of returns, and piled on new risks that it did not completely understand.
In her highly readable style, Carpenter analyses the mistakes made by the industry in the run-up to the crash when billions were wiped off the value of property across the region, and it became clear that in the pursuit of high returns and a place in the wider financial world, the industry had turned its back on the basics – bricks and mortar. This book is aimed at students and younger professionals studying or working in the real estate industry who need to understand the events that shaped the world they are entering into, and the lessons that can be learned from them.
Table of Contents
- The arrival of the Americans
- The Americans bring 20% investing to Europe
- The Germans go international (1995 – 2001)
- The return of the locals (1998 – 2001)
- Property enters the financial markets (2001 – 2004)
- Expansion of the European funds (2001 – 2004)
- The response from the Americans (2002 – 2004)
- The crisis comes early for German openended funds, as Americans pick up the opportunities (2004 –2006)
- Europe overheats (2004 – 2007)
- Denial, then crash (2007 – 2009)
- Fallout for the Americans (2008 – 2011)
- Fallout for European investors and lending (2008 – 2011)
- Rebuilding the business models, and trend towards the next cycle (2011 – 2017)
Andrea Carpenter is a freelance writer and Director of Women Talk Real Estate. She was Editor of EuroProperty for seven years, spent three years as a Director at INREV, and in 2008, won the Outstanding Industry Contribution Award at the IPE Real Estate Awards for her contribution to the development of the European fund management industry.
"High Rise and Fall takes a no holds barred view of the historically cyclical nature of the property sector to provide an invaluable perspective for any new entrant, particularly of the core financial markets that underpin and invest in property globally as a core investment class. When 75% of the world wealth is invested in global real estate this book gives a unique perspective on the financial backbone that make this one of the most exciting sectors to be involved with. A must read for "the love of property" on the "revival and survival" associated with a career in this great profession." Amanda Clack is Executive Director, Head of Strategic Consulting, CBRE and is the Immediate Past President of RICS