Guidelines for Investments in Commercial Real Estate 2nd Edition

Two years ago when compiling the first edition of this book, we saw govern- ments all over the world trying to stabilize the financial systems in their coun- tries with huge amounts of money after the sharp decline of almost all markets. In particular, the governments helped the banking industry which struggled with severe cash flow problems because markets had suddenly stopped buying financial instruments which are now widely regarded as intentionally designed to obscure the huge risks associated with them. From a global perspective, governments were all in all quite effective with their measures and 2010 saw the start of a broad recovery not only in the financial industry, but also in the commercial real estate market in almost all business centers worldwide. As a consequence of the last financial crisis, investors and all other players in this field became more cautious and real estate-related financial products are now more transparent. In parallel to the market recovery, a new phenomenon became reality: the markets asked if the governments of the countries which had organized the rescue of their major banks would now have the financial strength to re-pay the bonds they had sold to finance the bank rescues and other economic programs. In particular in Europe, countries like Greece, Spain, Por- tugal and even Italy now have to face high interest rates on their bonds and are suffering because their economies are not growing fast enough to balance all the competing economic interests. On the other hand, interest rates for real estate project financing are lower than ever before in countries which were not severely affected by the financial crisis during the last few years and inflation in those countries is higher than the interest rates banks pay on simple mon- etary investments. Therefore, in addition to investments in the stock markets, we see broad investments in real estate in countries like Germany where prices continue to increase, while in other countries like Spain, real estate prices de- cline. In this situation it is more than ever necessary to carefully evaluate the long-term viability of investments in real estate, keeping in mind that history shows that if the investments are professionally reviewed and professionally executed, then most are ultimately successful.

We are very happy to have in our growing Legalink network, which has more than 3000 lawyers in independent law firms located in most business centers on all five continents, experts in the field of real estate acquisition and finance. These lawyers are ready to advise and assist investors in all aspects of investments and transactions involving commercial real estate, and other real prop- erty issues, as well.

The experts of the Legalink network know each other personally from at- tending at least two meetings a year, which include meetings with colleagues in special interest groups focused on real estate practice, and from working together on cross-border projects. In discussions with our clients, we found that many of them, as well as other potential investors, would like to receive an introduction to the rules governing investing in commercial real estate through- out the world, as well as other aspects that have to be taken into account in commercial real estate transactions. In this book, we are pleased to give poten- tial investors a first overview of various factors which must be taken into ac- count when investing in commercial real estate in many countries of the world in which they might be interested. Of course, every single placement has to be reviewed in detail by specialists.

You will find contact data of the firms within this book and on the website of our Legalink network (www. Legalink.ch). All firms are pleased to assist in this field and will give you professional advice.

If you require a cross-border analysis of diverse law aspects, a joint effort to facilitate a cross-border transaction, or if you have any questions concerning how our network can get you the most advantageous solutions for investments in commercial real estate, please do not hesitate to contact us. We will be happy to refer you to the specialists of our network who can best assist you in your case.