ISA's Outlook 2023

In 1994, the real estate industry was facing challenges such as the aftermath of a mild recession in the US, overbuilding due to tax-loss driven "accelerated depreciation", and an uncontrolled savings and loan lending binge. These factors led to record-high vacancy rates in the late 1980s, and the National Council of Real Estate Investment Fiduciaries (NCREIF) Property Index (NPI) registered its worst four years from 1990 to 1993. Similarly, the UK's Investment Property Databank (IPD) monthly index experienced a boom-bust pattern, with returns swinging from -18% in 1990 to +35% in 1994, then dropping to zero in 1995. Despite these challenges, the author, who joined LaSalle Partners in 1994, saw opportunities in the market and looked ahead to the future.