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Working Papers

Mind the Liquidity Gap

Working paper #734
Jacques N. Gordon

The flow of capital to international real estate vacillates between risk aversion and risk tolerance. As 2012 unfolds, low-risk core assets in the most expensive districts of the world are in great demand. Assets with more complexity or in less central locations are placed on the other side of a great divide. The debt crisis in Europe highlights the stark contrast between pricing on either side of this “liquidity gap.” The emerging markets of the world continue to have very active development pipelines. However, credit is also being squeezed in China, though infrastructure spending will continue as part of the government’s “go west” policy.

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