INCANS Risk INSIGHT
INCANS Risk Insight Publication: The Power of Data
"In simple terms, the real estate industry needed to recognise the power of data in driving accurate and transparent decision making. The Credit Crunch of 2008 was initially driven by a sharp rise in defaults on subprime mortgages in the US. Here the fundamental problem arose because interest rates were too low, lenders didn’t have a robust underwriting process in place, the quality of the borrowers was far lower than declared, and the underlying assets held as collateral were far less valuable than predicted. This perfect storm of factors emerged because there was very little data available to quantify these risks, and it was labour-intensive and cumbersome to estimate the overall risk of rental default within a portfolio. More alarmingly, nobody could be bothered to look in the box and see what was in there. Nobody checked the quality of the underlying cashflows that ultimately supported asset values and serviced the debt."
Read the full article HERE.
INCANS Risk Insight Publication: Breaking Out Of The Frame
Core, prime, opportunistic – what does it all mean? Years of subjective labelling of real estate assets is leading to poor decision making.
INCANS Risk Insight Publication: Unlocking Real Estate’s Data Potential
In this quarter’s INCANS Risk Insight, the overall theme is how data will be crucial for allowing us in real estate to make better informed decisions.
INCANS Risk Insight Publication: Capital Values Exit the Building, Analysis of Income Enters
For decades there have been calls for a re-think on CRE valuations. Now with the perfect storm of a data revolution, shorter leases, more operating expenses, ESG and Covid, this is the time the property valuation community could finally accept that analysis of the income is more important than capital values.
INCANS Risk Insight Publication: How Well Do You Know Your Tenant’s Income Risk?
2021 will see commercial real estate tenants will pay rent of more than US$1,400bn. In a low capital growth market commercial real estate becomes a fixed income style investment with a floating capital opportunity attached. But, in the current pandemic, it’s important to understand the occupier, their business environment, along with specific requirements.
INCANS Risk Insight Publication: Quantifying the Risk of Tenant Failure
The growing popularity of commercial real estate as an investment is hardly surprising given the prevailing central bank policy of a zero-interest rate environment. Under such conditions government and corporate bond yields no longer deliver the required returns so investors have been forced to look elsewhere for a stable and recurring revenue stream.