Tide Turns On US Real Estate IPO Rally

Real estate may have been the stalwart of the string of IPOs seen in the US so far in 2010, with US$586mn worth of deals, but sentiment appears to be turning against the sector. We are seeing an increasing number of property firms coming to market that are being forced to cut the size of their listings or alternatively face shelving them altogether. As we explain below, this is not just symptomatic of a general correction in the global IPO market. Instead, the fundamentals of the sector are to blame. Robert Edelstein , professor of Real Estate and Urban Economics at the University of California at Berkeley, appears to capture the present mood well: 'The market is starting to recognise the complexities of owing troubled real estate. The fragility of the economy just adds more risk.'

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