DOCSLIB.ORG

Canadian Investments Into the UK Property Market

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Canadian Investments Into the UK Property Market Canadian investments into the UK property market Canadians raising London’s skyline Investors from Canada have long been influential in shaping the UK real estate market. Perhaps one of the best-known examples is the development of Canary Wharf in London. In the 1980s it was a Canadian, Paul Reichmann and his company Olympia and York, that Margaret Thatcher (then UK Prime Minister) called upon to redevelop land in East London left derelict by the decline of the ports into what is now Canary Wharf, one of the world’s leading financial centres. The development of Canary Wharf has not been without controversy. Building started in 1988 but the envisaged transport infrastructure was not delivered until 1999 when the Jubilee line extension opened. Without adequate transport, there was limited interest from large financial companies to move into the area although two newspaper companies were attracted to the new open plan spaces on offer. The iconic One Canada Square sky scraper became the UK’s tallest building when it opened in 1991. Unfortunately, the completion of the building coincided with an economic downturn in the UK which exposed Olympia and York’s high levels of debt, ultimately leading the company to declare bankruptcy in 1992. In the intervening years, Reichmann tried to buy his way back into the site, Canary Wharf has changed hands on numerous occasions and continues to expand. In April 2015, Brookfield Property Partners (which also originated in Canada) and the Qatar Investment Authority jointly acquired the Canary Wharf Group. Reichmann’s original vision for a modern open-plan business hub has over the decades been realised. The 97-acre estate currently has 37 office buildings and more than 300 shops, cafés, bars and restaurants, providing employment to over 112,000 people. A mixed-use extension to the estate is being built on neighbouring Wood Wharf, with plans to offer 3,200 residential units, 2 million sq ft of commercial office space and a further 335,000 sq ft of shops, restaurants and community uses. The first offices are scheduled to open in 2019. @DACBeachcroft DAC Beachcroft LLP www.dacbeachcroft.com Canada’s leading global real estate investment firms It has been argued that Reichmann opened the doors for Canadian companies to think globally for real estate investment opportunities and they are now amongst the most influential global real estate investors. Five Canadian companies (Ivanhoe Cambridge, Sun Life Financial, Canadian Pension Plan Investment Board, Ontario Teachers’ Pension Plan and OMERS) are within the top 25 global real estate investors and together hold real estate assets under management worth US$ 144 billion. Three of these companies (CPPIB, Ontario Teachers’ Pension Plan and OMERS) are public pension funds which over the last two years have increased real estate assets under their management by 26 per cent from US$ 56.5 billion to US$ 71.2 billion. Figure 1. Top global real estate investors, by real estate net Assets under Management (US$B) Source: Preqin, 2017 @DACBeachcroft DAC Beachcroft LLP www.dacbeachcroft.com Total commercial investment into UK real estate Over the past decade, the UK has received nearly US$ 29 billion of commercial real estate investment from all Canadian sources reaching its peak in 2015 when US$ 8.775 billion was invested. In 2016, Canadian investments accounted for 4.4 per cent of direct total investment from overseas into UK real estate. Figure 2. Total Commercial Investment from Canada into UK Real Estate, 2006 to 2016 Source: Real Capital Analytics Investments from Canadian Pension Funds Canadian pension funds have been directly acquiring a wide range of assets from around the world since the early 1990s when Provincial Governments legislated that they could be run by professional boards. These large-scale and long term investors have escaped relatively lightly from tougher regulations introduced to the banking sector following the financial crisis of 2008-2009 and in an environment of low interest rates which are affecting returns from traditional investments, are now investing in a wider range of assets including real estate.1 Aside from real estate, Canadian Pension Funds have invested in major infrastructure such as UK ports, London City Airport, High Speed 1 and have acquired other companies that are responsible for providing community support services and mobile telephone services. @DACBeachcroft DAC Beachcroft LLP www.dacbeachcroft.com Oxford Properties to other pension funds, CPPIB works on long-term investment timelines which involves developing strategies to cope with Oxford Properties, the real estate arm of OMERS Pension Fund, potential political uncertainty. opened an office in London in 2008 to invest, develop and manage programmes throughout Europe with a focus on core office and “If we are investing on 10 or 20 years, the political risks are retail assets in Central London and Paris. cycles. We are more focused on the fundamentals of the market: whether we think it is a good economy; does it have a good Its investments into the UK include: legal system; does it have a good financial structure; what are ▪ 50,000 sq ft of high end retail and office space the demographics? Those topics are closer to our heart.” in New Bond Street, London as part of a joint Andrea Orlandi, head of real estate investments for Europe, venture with Richemont’s real estate CPPIB4 investment fund purchased in 2014. Four months after the Brexit vote, in October 2016, CPPIB ▪ 374,000 sq ft of office space at Paternoster announced an extension to an existing joint venture with Hermes Square, London purchased in 2012 which Investment Management at Wellington Place, Leeds. Wellington means that Oxford holds the majority Place is a mixed-use development providing 1.5m sq ft of offices, share of the Paternoster Square estate retail and leisure facilities in a prime central Leeds location. The management company. outlined planning permission for the eight acre site was for ▪ A joint project with British Land to develop The 1m sq ft. Leadenhall Building, also known as “The Cheesegrater” due to its distinctive shape, 1Inside the risky strategy that made Canada’s biggest pension plans the new which opened in 2015 and provides ‘masters of the universe’, Teresa Tedesco and Barbara Schecter, Financial Post, October 2016 2 610,000 sq ft of office and retail space. 2Data extracted from www.oxfordproperties.com on 1st March 2017 3Data extracted from www.cppib.com on 2nd March 2017 4Investor interview: CPPIB, Richard Lowe, IPE Real Estate Magazine, Sept/Oct 2016 CPPIB CPPIB also opened a London base in 2008 and by December 2016 Margarethe Theseira had made direct commercial investments into six offices schemes The material is provided by Dr Margarethe Theseira. She is a in Central London with a combined 652,000 sq ft of gross leasing leading independent consultant with extensive experience area. CPPIB’s geographical interest extend beyond the Capital in researching and developing policy and strategy work City and its immediate vicinity when it comes to exploiting with clients spanning the private, public and charity sectors. opportunities within retail. It has invested in 5,295,000 sq ft of Margarethe spent over a decade managing the economics and retail space in shopping centres in Glasgow, Canterbury and intelligence functions for the Mayor of London and Greater Birmingham as well as in London.3 These investments have taken London Authority Group. She is an Associate of the Centre the form of joint ventures with a range of partners. for London, an Honorary Senior Research Fellow at University For CPPIB, the attraction of building and managing a portfolio of College London and holds a PhD in modelling awarded by property investments is to provide a stable income stream that is Cranfield University. pegged to inflation over the long term with the potential for asset value growth. CPPIB recognises that real estate investment brings diversification benefits as it has a relatively low correlation with other asset classes such as public equities and bonds, and provides a cushion against market and business-cycle volatility. In 2015, CPPIB entered the student housing market when it purchased for £1.1 billion one of the UK’s largest student accommodation providers, Liberty Bell along with the Liberty Management Platform. UK property represents 14.1% of CPPIB’s real estate portfolio with a value of around C$5.2 billion. CPPIB’s interest in UK real estate remains undiminished post Brexit and the company’s strategy is for the UK to continue as its core market in Europe. Similar @DACBeachcroft DAC Beachcroft LLP www.dacbeachcroft.com.
Load more

Recommended publications
  • George Soros
    Click here for Full Issue of EIR Volume 23, Number 44, November 1, 1996 �ITffiInvestigation The secret financial network behind \vizard' George Soros by William Engdahl The dossier that follows is based upon a report released on . Following the crisis of the European Exchange Rate Oct. 1 by EIR's bureau 'in Wiesbaden, Germany, titled "A Mechanism of September 1992, when the Bank of England Profile of Mega-Speculator George Soros." Research was was forced to abandon efforts to stabilize the pound sterling, contributed by Mark Burdman, Elisabeth Hellenbroich, a little-known financial figure emerged from the shadows, to Paolo Raimondi, and Scott Thompson. boast that he had personally made over $1 billion in specula­ tion against the British pound. The speculator was the Hun­ Time magazine has characterized financier George Soros as garian-born George Soros, who spent the war in Hungary a "modem day Robin Hood," who robs from the rich to give under false papers working for the pro-Nazi government, to the poor countries of easternEurope and Russia. It claimed identifying and expropriating the property of wealthy fellow that Soros makes huge financial gains by speculating against Jews. Soros left Hungary afterthe war, and established Amer­ western central banks, in order to use his profits to help the ican citizenship after some years in London. Today, Soros is emerging post-communist economies of eastern Europe and based in New York, but that tells little, if anything, of who former Soviet Union, to assist them to create what he calls an and what he is. "Open Society." The Time statement is entirely accurate in Following his impressive claims to possession of a "Mi­ the first part, and entirely inaccurate in the second.
    [Show full text]
  • The Case of New York City's Financial District
    INFORMATION TECHNOWGY AND WORLD CITY RESTRUCTURING: THE CASE OF NEW YORK CITY'S FINANCIAL DISTRICT by Travis R. Longcore A thesis submitted to the Faculty of the University of Delaware in partial fulfillment of the requirements for the degree of Honors Bachelor of Arts in Geography May 1993 Copyright 1993 Travis R. Longcore All Rights Reserved INFORMATION TECHNOWGY AND WORLD CITY RESTRUCTURING: THE CASE OF NEW YORK CITY'S FINANCIAL DISTRICT by Travis R. Longcore Approved: Peter W. Rees, Ph.D. Professor in charge of thesis on behalf of the Advisory Committee Approved: Robert Warren, Ph.D. Committee Member from the College of Urban Affairs Approved: Francis X. Tannian, Ph.D. Committee Member from the University Honors Program Approved: Robert F. Brown, Ph.D. Director, University Honors Program "Staccato signals of constant information, A loose affiliation of millionaires and billionaires and baby, These are the days of miracle and wonder. This is a long distance call. " Paul Simon, Graceland iii ACKNOWLEDGEMENTS The author would like to recognize and thank Dr. Peter Rees for his guidance on this project. Without the patient hours of discussion, insightful editorial comments, and firm schedule, this thesis would have never reached completion. The author also thanks the University Honors Program, the Undergraduate Research Program and the Department of Geography at the University of Delaware for their financial support. Many thanks are due to the Water Resources Agency for New Castle County for the use of their automated mapping system. IV TABLE OF CONTENTS LIST OFTABLES .................................... viii LIST OF FIGURES ix ABSTRACT ....................................... .. x Chapter 1 THE CITY IN A WORLD ECONOMY ...................
    [Show full text]
  • (SEP 2 5 1989 LJPRA R Acknowledgements
    MIT LIBRARIES DUPL 1 3 9080 00589045 1 CANADIAN INVESTMENT IN THE U.S. REAL ESTATE MARKET by William Richard Evans H.B.A., Business Administration, The University of Western Ontario, Canada 1983 Submitted to the Department of Architecture in partial fulfillment of the requirements for the degree of Master of Science in Real Estate Development at the Massachusetts Institute of Technology October, 1989 ( )William Richard Evans 1989 The author hereby grants to M.I.T. permission to reproduce and distribute publicy copies of this thesis document in whole or in part/. W Signature of author William Richard Evans Department of Architecture July 3/1, 1989 Certified by 34fsMcKellar Professor. Department of Architecture Thesis Supervisor Accepted by Michael Wheeler Chairman Interdepartmental Degree Program in Real Estate Development (SEP 2 5 1989 LJPRA R Acknowledgements This thesis represents the effort of a Canadian student possessing previous employment experience with one of the major Canadian developers referred to within this research. Research was conducted over a two-month period, durina which time the author spent considerable time interviewing in Canada. The Canadian real estate development industry, in aeneral, is extremely private and tightly controlled by a relatively small number of companies. Very little has been documented on the industry and therefore interviews were a critical component of this research effort. A variety of Canadian industry participants agreed to be interviewed and I thank them for their interest and cooperation.
    [Show full text]
  • UK Jubilee Line Extension (JLE)
    UK Jubilee Line Extension (JLE) - 1 - This report was compiled by the OMEGA Centre, University College London. Please Note: This Project Profile has been prepared as part of the ongoing OMEGA Centre of Excellence work on Mega Urban Transport Projects. The information presented in the Profile is essentially a 'work in progress' and will be updated/amended as necessary as work proceeds. Readers are therefore advised to periodically check for any updates or revisions. The Centre and its collaborators/partners have obtained data from sources believed to be reliable and have made every reasonable effort to ensure its accuracy. However, the Centre and its collaborators/partners cannot assume responsibility for errors and omissions in the data nor in the documentation accompanying them. - 2 - CONTENTS A INTRODUCTION Type of Project Location Major Associated Developments Current Status B BACKGROUND TO PROJECT Principal Project Objectives Key Enabling Mechanisms and Timeline of Key Decisions Principal Organisations Involved • Central Government Bodies/Departments • Local Government • London Underground Limited • Olympia & York • The coordinating group • Contractors Planning and Environmental Regime • The JLE Planning Regime • The Environmental Statement • Project Environmental Policy & the Environmental Management System (EMS) • Archaeological Impact Assessment • Public Consultation • Ecological Mitigation • Regeneration Land Acquisition C PRINCIPAL PROJECT CHARACTERISTICS Route Description Main Termini and Intermediate Stations • Westminster
    [Show full text]
  • A Global for the Civil Savage: Re Or Constructed Landscape in a Postcivilised Modernity
    1998 ACSA INTERNATIONAL CONFERENCE 233 A Global for the Civil Savage: re or Constructed Landscape in a Postcivilised Modernity JAMES McQUILLAN National University of Singapore If mythology does not exist for civilized man today,' how does he and other market facilities therefore does not count as a global city! locate himself in space, in time and in acontinuously meaningful and Most relevant here is the increased importance of real estate invest- ordered existence? Order and the search for order is perhaps the most ment and the influence of real estate investors, which can then besetting problem of modern intellectuality under postmodern con- assume a symbolic aspect due to the predilections of global real ditions, especially if the rubrics of deconstruction are permitted, but estate, swung by issues of public morality and symbolic reforms. not in this discourse (for reasons which may be clearer later). Order Therefore headlines reflecting such concerns are important indica- presumes a taxonomy and related definitions, and in the world of tors for global real estate investors, and the competition, for example architecture and urbanism this is just what is lacking - the desperate between two Pacific Rim contenders for such investment, Los plurality and polyvalence of the so-called "environment" presents a Angeles and Singapore, was swung in the latter's favor due to the struggle todefine or redefine the city, the suburb (Ellin; 247). or even 1992 riots in LA, such was the damage done to its urban image. the countryside,? now generally violated in most viable climatic In this kind of politics Singapore is singularly successful, as its zones by "development" of some form.
    [Show full text]
  • The Isle of Dogs: Four Development Waves, Five Planning Models, Twelve
    Progress in Planning 71 (2009) 87–151 www.elsevier.com/locate/pplann The Isle of Dogs: Four development waves, five planning models, twelve plans, thirty-five years, and a renaissance ... of sorts Matthew Carmona * The Bartlett School of Planning, UCL, 22 Gordon Street, London WC1H 0QB, United Kingdom Abstract The story of the redevelopment of the Isle of Dogs in London’s Docklands is one that has only partially been told. Most professional and academic interest in the area ceased following the property crash of the early 1990s, when the demise of Olympia & York, developers of Canary Wharf, seemed to bear out many contemporary critiques. Yet the market bounced back, and so did Canary Wharf, with increasingly profound impacts on the rest of the Island. This paper takes an explicitly historical approach using contemporaneous professional critiques and more reflective academic accounts of the planning and development of the Isle of Dogs to examine whether we can now conclude that an urban renaissance has taken place in this part of London. An extensive review of the literature is supplemented with analysis of physical change on the ground and by analysis of the range of relevant plans and policy documents that have been produced to guide development over the 35-year period since the regeneration began. The paper asks: What forms of planning have we seen on the Island; what role has design played in these; what outcomes have resulted from these processes; and, as a result, have we yet seen an urban renaissance? # 2009 Elsevier Ltd. All rights reserved. Keywords: Isle of Dogs; Urban design; Planning; Urban renaissance Contents 1.
    [Show full text]
  • Paul Reichmann Had a Dream. He and His Brothers Would Chal
    3 FREE TRAINS OR FREE RIDERS? Reichmann's windfall train Paul Reichmann had a dream. He and his brothers would chal- lenge the oldest banking district in the world by building a financial centre on wasteland in the heart of London. They would compete with the City by offering the great financial houses accommodation in purpose-built skyscrapers. They had money aplenty including the biggest property empire in North America, which had amassed assets of $25 billion. Ingenuity was no problem: they had accomplished feats where other entrepren- eurs had feared to tread. Had they not built the World Financial Centre on a sandbar in New York's Hudson River? Daring was a family characteristic: in their youth, as Hitler tried to conquer Europe, from their enclave in Tangier they worked to defy the Nazis, launching covert mercy missions to keep alive the victims of the concentration camps. But without good transport links, their dream was not viable. Shrewdly, they acquired an 80-acre site on the Isle of Dogs in what was once the heart of a transport hub that knitted together a seafaring empire. The Reichmanns were offered a good deal by the government. Prime Minister Margaret Thatcher, in her bid to regenerate the area, turned Docklands into an enterprise zone. The brothers would be relieved of taxes on rents earned by 64 FREE TRAINS OR FREE RIDERS? their company, Olympia & York (O&Y). Here, out of the derelict docks, they could construct a masterpiece that combined the finest architecture with commercial vitality. They would lure the financiers from their mansions in the stockbroker belt to create a real estate for the 21st century.
    [Show full text]
  • Volume 35, Number 2, June
    506 Rapport d’expert de Darrell Duffi e SYSTEMIC RISK IN FINANCIAL SYSTEMS AND CAPITAL MARKETS IN RELATIONSHIP WITH THE PROPOSED DRAFT CAPITAL MARKETS STABILITY ACT Report of Darrell Duffie, Dean Witter Distinguished Professor of Finance at the Graduate School of Business, Stanford University May 3, 2016 507 Rapport d’expert de Darrell Duffi e Résumé Le présent rapport examine certaines questions relatives à l’ébauche d’avant-projet de la Loi sur la stabilité des marchés des capitaux (LSMC). Les enjeux liés à la LSMC ne sont pas étudiés de façon exhaustive dans ce rapport. Il s’agit d’un rapport parmi plusieurs rapports d’experts, chacun traitant d’un sous-ensemble de questions. La partie 1 décrit le rôle du système financier au sein de l’économie nationale en général, en mettant l’accent sur le rôle des marchés de capitaux et les interdépendances au sein des marchés de capitaux. Le système financier (c.-à-d. la partie de l’économie qui gère les flux de capitaux, la liquidité et le risque financier) est essentiel à l’économie réelle (c.-à-d. la production, la distribution et la consommation de biens réels). Sans un accès stable et peu coûteux aux marchés financiers, l’économie réelle ne pourrait fonctionner. Les marchés de capitaux sont la sous-catégorie du système financier qui comprend les marchés des réclamations relatives aux obligations et aux capitaux propres, ainsi que les services financiers et les marchés qui les soutiennent. Les produits financiers, les fournisseurs de services financiers et les marchés au sein desquels les produits financiers sont échangés sont interreliés de façon complexe et forment le système financier.
    [Show full text]
  • Business Groups in Canada: Their Rise and Fall, and Rise and Fall Again
    NBER WORKING PAPER SERIES BUSINESS GROUPS IN CANADA: THEIR RISE AND FALL, AND RISE AND FALL AGAIN Randall Morck Gloria Y. Tian Working Paper 21707 http://www.nber.org/papers/w21707 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 November 2015 We are grateful for very helpful comments from Asli M. Colpan, Takashi Hikino, Franco Amatori, Tetsuji Okazak and participants in Kyoto University’s conference on Business Groups in Developed Economies and in the 2015 World Economic History Congress. We are grateful to the Bank of Canada for partial funding. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer- reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2015 by Randall Morck and Gloria Y. Tian. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Business Groups in Canada: Their Rise and Fall, and Rise and Fall Again Randall Morck and Gloria Y. Tian NBER Working Paper No. 21707 November 2015 JEL No. G3,L22,N22 ABSTRACT Family-controlled pyramidal business groups were important in Canada early in the 20th century, amid rapid catch-up industrialization, but largely gave way to widely held free-standing firms by mid- century. In the 1970s and early 1980s – an era of high inflation, financial reversal, unprecedented state intervention, and explicit emulation of continental European institutions – pyramidal groups abruptly regained prominence.
    [Show full text]
  • The Regeneration of London's Docklands: New Riverside
    Università degli Studi di Padova Dipartimento di Studi Linguistici e Letterari Dipartimento di Scienze Storiche, Geografiche e dell'Antichità Corso di Laurea Magistrale in Lingue e Letterature Europee e Americane Classe LM-37 Tesi di Laurea The regeneration of London’s Docklands: New riverside Renaissance or catalyst for social conflict? Relatrice Laureando Prof. Tania Rossetto Marianna Feriotto 1046538/ LMLLA Anno Accademico 2014/ 2015 2 CONTENTS p. Acknowledgments…………………………………………………………………………………... 5 Introduction…………………………………………………………………………………………. 7 I. Chapter One: the history of London’s Docklands………………………………........... 9 - Introduction…………………………………………………………………………………. 9 - The origins and the Roman Period………………………………………………………….10 - The Middle Ages…………………………………………………………………………... 13 - The Renaissance and the Early Modern Period……………………………………………. 17 - The 18th and 19th centuries…………………………………………………………………. 22 II. Chapter Two: Crisis and decline…………………………………………………….... 33 - The end of the century and the beginning of the Docklands’ decline……………………... 33 - The 20th century and the First World War…………………………………………………. 35 - European competition and the US crisis…………………………………………………... 38 - The Second World War……………………………………………………………………. 39 - The Post-war period and containerisation………………………………. ……………….. 42 III. Chapter Three: The Rebirth………………………………………………………….... 49 - The London Docklands Development Corporation (LDDC)……………………………… 49 - Building process and housing……………………………………………………………… 52 - Transport…………………………………………………………………………………… 52 - Environmental
    [Show full text]
  • INFORMATION TECHNOLOGY and DOWNTOWN RESTRUCTURING: the CASE of NEW YORK CITY's FINANCIAL Districtl
    INFORMATION TECHNOLOGY AND DOWNTOWN RESTRUCTURING: THE CASE OF NEW YORK CITY'S FINANCIAL DISTRICTl Travis R Longcore ~partmentof~phy University of California, Los Angeles Los Angeles, California 90024-1524 Peter W Rees ~partment of Geography University of Delaware Newark, Delaware 19716 Abstract: Among central-city land-use districts, the financial district traditionally has been the most locationally stable. Advances in building and business technology, such as steel frame contruction, the passenger elevator, and the telephone, have been accommodated through refitting existing sites. The changes in building technology required by modern, global financial companies, particularly the large horizontal footplates that exceed the size of traditional sites, have finally loosened the concentrated business district location. In downtown Manhattan, the result has been a doughnut shape, as large financial institutions have moved to the periphery, leaving Wall Street with back-office functions. The obsoles­ cence of traditional locations imposed by a building technology that favors horizontal over vertical spaces may be offset by the perceived need for face-to-face contact. The degree to which financial institutions in world cities maintain a dispersed but identifiable district in the future may be an accurate measure of the value of urban propinquity. Technological change in building design has long influenced central-city geogra­ phy. The steel-frame construction cage and the passenger elevator allowed the land market to concentrate downtown land values, producing the skyscraper office building that has become a worldwide urban symbol. The telephone permitted reorganization of internal office geography and reduction in face-to-face commu­ nication. Electric power applied to manufacturing transformed the vertical factory of steam engine-driven pulleys to the horizontal suburban shop floor of individual motors (Vance, 1990).
    [Show full text]
  • The Commercial Real Estate Crisis of the 1980S and 1990S
    RESEARCH PAPER The Commercial Real Estate Crisis of the 1980s and 1990s Canadian Business History Professor Joe Martin This research paper was prepared by Darren Karn under the direction of Professor Joe Martin as the basis for class discussion rather than to illustrate either effective or ineffective handling of a managerial situation. Copyright 2017 by the Governing Council of the University of Toronto. To order copies or request permission to reproduce materials, write to the Rotman School of Management, Business Information Centre, Toronto, M5S 3E6, or go to www.rotman.utoronto.ca/bic. No part of this publication may be reproduced, stored in any retrieval system, used in a spreadsheet, or transmitted in any form or by any means, whether by photocopying, recording or by electronic or mechanical means, or otherwise, without the written permission of the Rotman School of Management. The Commercial Real Estate Crisis of the 1980s and 1990s Introduction The 1980s and early 1990s were tumultuous for the banking industry in both Canada and the United States. While the banks weathered the rash of sovereign debt defaults in the early 1980s, they would experience only a few short years before the next debt crisis — this time precipitated by loose lending practices on domestic commercial real estate, rather than sovereign and business loans in Latin America. The Commercial Real Estate crisis of the early 1990s proved costly for the financial and real estate development communities in North America. While several banks failed in the United States, the larger, diversified banks of Canada did not fail, but suffered through drastic reductions in credit and significant losses in loan portfolios.
    [Show full text]