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European Commercial Real Estate Market Stabilized, Fund Manager Says

06/13/2013 | By Allen Kenney

Scott Crowe, managing director with Resource Real Estate, joined REIT.com for a video interview in Chicago at REITWeek 2013: NAREIT’s Investor Forum.

Crowe recently moved from investment firm Cohen & Steers to head up Resource Real Estate’s securities practice. Crowe discussed the experience of starting the division.

“Resource is a great enterprise,” he said. “It’s very entrepreneurial. It has a 20-year track record in real estate investment and a very unique background in credit underwriting. I’m also having a great time setting up my own property securities platform to invest our clients’ capital in line with the investment philosophy and experience that I’ve gained over the years.”

Crowe’s group recently launched its first fund, the Diversified Income Fund. The fund invests in both property securities and direct real estate and real estate credit. The group is also working on a joint venture with a partner in Asia to create a global REIT product for institutional investors.

Crowe shared his thoughts on what he views as an improving situation in the European market.

“The underlying commercial real estate markets have stabilized,” he said. “If you have good, quality real estate, there’s debt available, and the spreads are very wide. I think Europe’s attractive. It doesn’t have to be the highest-quality real estate, but stabilized real estate in a decent location. Where you have to still be careful is development, leverage and the periphery. It’s still too early to take that kind of risk. But I definitely think we’re in the bottoming-out phase of the European real estate market.”

Crowe said he thinks investors are underestimating the investment potential in Europe in the current market environment.

“Frankly, Europe is one of the only places with real value left today,” said Crowe, who noted that his firm is overweighting selected stocks in the region.