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Exit Options For Opportunistic Real Estate Investors And Their Potential Effects On Real Estate Markets: German Evidence

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  • Thomas Beyerle
  • Nico B. Rottke

Abstract

In several worldwide real estate markets, the phenomenon can be observed that in times of imbalanced market situations, together with a weak economic environment, international real estate investors with a high yield ìopportunisticî strategy, foremost US or U.K. funds, enter national markets and buy large real estate portfolios, real estate companies or non performing loan packages. Often, the imbalanced situation gets solved after some years as these opportunistic investors bring together supply and demand when equity resources are low. As this type of investor has a short term horizon, the portfolios are likely to be sold within a time frame of five to seven years. As the entry period typically happens to be within a short time slot as well - due to the economic environment - the exit period of most opportunistic investors will also be within a short time frame. This paper provides empirical evidence for the German real estate markets by analyzing the effect of portfolio purchases and potential sales of large residential real estate transactions from 1997 to 2005. Hypotheses are generated what will happen within the German residential real estate sector up until 2012. Comparisons are drawn to real estate markets in the US and the U.K.

Suggested Citation

  • Thomas Beyerle & Nico B. Rottke, 2006. "Exit Options For Opportunistic Real Estate Investors And Their Potential Effects On Real Estate Markets: German Evidence," ERES eres2006_132, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2006_132
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2006-132
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    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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