The Overlook Hotel, the isolated Colorado retreat which formed the backdrop for Jack Nicholson and his family in the 1980 film version of The Shining, probably would have made a decent investment for a private equity real estate firm, particularly given the current appetite for hospitality assets. Just spruce up the curtains, refurbish the dining area and stop the blood from gushing out of the elevators.
For today's real estate investors, watching The Shining must feel somewhat familiar. As with any horror movie, you know something bad is going to happen but you never really know when.
Which pretty much sums up current sentiment in the global real estate markets.
In such buoyant times, finding distressed assets is more difficult than ever, but plenty of investors are looking (and waiting). Beginning on p. 29, we analyze two notable areas where opportunistic funds are active: non-performing loans in Italy and condo developments anywhere it's sunny in the US. The vultures are circling
As one of the largest investors in the private equity real estate industry, Lehman Brothers has invested in its fair share of distressed assets. On p. 24, we sit down with Gerald Parkes, the head of the firm's European private equity real estate team, and Mark Newman, chief investment officer of the global group, and get their perspective on Lehman's European real estate franchise. Given the firm's recent performance, the two industry veterans have reasons to be smiling.
Others smiling these days are investors in the retail sector, particularly the distressed players who have been able to turn around ailing companies like Mervyn's. On p. 40, we speak with three experienced retail investors to get their take on the past, present and future of the sector.
Across the Atlantic, investors of a different stripe may soon be hunting for their own distressed assets: old European castles. Sky TV recently announced a partnership with www.castlesofscotland.com, allowing viewers the opportunity to buy real estate via an interactive TV system (p.4). The upkeep might be a drag, but there's nothing cooler than saying you own a castle—and nothing easier than buying it from your couch.
Happy shopping and enjoy the issue,