How will the subprime mortgage crisis and collapse of lehman and others affect private equities?
specifically, private equity funds that invest in hard assets within new york city real estate? i own a very basic insight of pe's so please explain in lamest language possible! gratefulness :)
Answers:
Hi (libra)lynn,
This is a very good examine, because the mortgage crisis is affecting all areas of the economy and private equity is overlooked regularly. The Lehman Brothers had a pretty significant chunk of the private equity industry through their private equity division holding $30 billion in assets lower than management, according to their website. So, as you can imagine, the collapse of Lehman Brothers is potentially markedly dangerous to the private equity industry. There is hope that the private equity branch will be sold to a suitable buyer for a good price, but that's adjectives speculation.
As for your specific interest in New York City real estate:
I live surrounded by NYC and the whole mortgage mess does not spell good word for anyone really, especially the high volume of investors located in the city. I'm not sure how any specific private equity funds will fare but most principal real estate funds have invested contained by real estate with the presumption that the housing bazaar would continue to boom with the reduction. However, around 2006 the housing market stopped climbing so dramatically, not exactly what the real estate investors hoped for. They expected prices to verbs to rise so that they could get profit from their real estate investments, and when this did not occur--and still have not occurred--many funds lost considerable amounts of money.
New York City is special, in that it is an island, so the housing prices haven't declined as much as far as I know. While nearby are lots of issues with NYC housing, the attraction of the major city and it's geographic inability to expand for current development insulates it from collapsing to the degree of other areas and allows tangible estate prices to continue to climb.
I hope this was of some facilitate to you,
Theo O'Brien Source(s): http://privateequityblogger.com/2008/09/lehman-brothers.html
Related Questions:
I am stuck between decide what to focus on more, Reverse Mortgages or leveraging my equity?
What is difference between reverse mortgage vs. home equity loan?
Anyone else out near own an adjustable rate mortgage and no equity not here to refinance?
Should a 72y/o widow w/no other assets get rid of home settle rotten reverse mortgage pocket remaining equity and rent apt?
What risks, equity, and other expectations related to signing onto someone else's mortgage?
Answers:
Hi (libra)lynn,
This is a very good examine, because the mortgage crisis is affecting all areas of the economy and private equity is overlooked regularly. The Lehman Brothers had a pretty significant chunk of the private equity industry through their private equity division holding $30 billion in assets lower than management, according to their website. So, as you can imagine, the collapse of Lehman Brothers is potentially markedly dangerous to the private equity industry. There is hope that the private equity branch will be sold to a suitable buyer for a good price, but that's adjectives speculation.
As for your specific interest in New York City real estate:
I live surrounded by NYC and the whole mortgage mess does not spell good word for anyone really, especially the high volume of investors located in the city. I'm not sure how any specific private equity funds will fare but most principal real estate funds have invested contained by real estate with the presumption that the housing bazaar would continue to boom with the reduction. However, around 2006 the housing market stopped climbing so dramatically, not exactly what the real estate investors hoped for. They expected prices to verbs to rise so that they could get profit from their real estate investments, and when this did not occur--and still have not occurred--many funds lost considerable amounts of money.
New York City is special, in that it is an island, so the housing prices haven't declined as much as far as I know. While nearby are lots of issues with NYC housing, the attraction of the major city and it's geographic inability to expand for current development insulates it from collapsing to the degree of other areas and allows tangible estate prices to continue to climb.
I hope this was of some facilitate to you,
Theo O'Brien Source(s): http://privateequityblogger.com/2008/09/lehman-brothers.html
Related Questions: