Although the results have been quite sad in the fourth quarter, there are many signs that this is about to change and do so really rapidly. Morgan Stanley has been showing that there are many losses as well as gains in their portfolio.
Since 2007 there have been huge loses in the real estate field and that is not getting any easier. When there was a fall in the market that let too many commitments that were from venture capital firms all over the country. There was an injection of 1.7 billion dollars into the market which proved that there was never going to be a slowdown.
However, when the bottom fell it really fell. Now there are many companies in the field of commercial real estate that are making investments and contributions hand over fist to ensure that there is new capital in the market.
Are Investors Afraid?
Although there has been a discussion of another downturn in the market, this has been widely dismissed by people as they have realized that the real difference between the current state and the past that when it comes to real estate there is real value and there is real dollars there. When there was a large beginning of recovery, much of the money that represented the entire pipeline of the company was in fact in real estate and that meant that about 55% of the portfolio was in real estate.
Now there are new opportunities that are opening, these are called “opportunity funds”, these represent a new development as well as forays into commercial real estate that has not been seen yet, this provides many new opportunities for investors to reach huge returns of up to 20%.
How Does Morgan Stanley Stack Up?
The company has already put in 1/3 of its entire equity to represent a huge growth that means that there will be much intense investment in places like London and New York. When this kind of money is being injected it means that the long term outputs of the company are going to be great for investors and that they can know that they are going to make their money back.
Morgan Stanley is starting to see returns as well as comebacks that have not been seen since before the crash of 2007. When it comes to ensuring that money is in the bank and that the investors are going to see their return it is the job of the funds to perform and to put that money in non-risky places. As the market continues to expand there is no reason to think that real estate will see another drop in the way that it did in the past for another cycle of 30 years. The Feds are getting ready to raise interest rates as the money continues to be injected into the economy. That will continue to offer new opportunity as well as new investments that continue to prosper.