Friday, March 11, 2011

US & International Real Estate Investments in Paris

The Wall Street Journal as long as CNBC have been hammering in the last few days that Fannie Mae and Freddy Mac could be closed by the Obama Administration, most probably requiring an Act of Congress.

These kinds of announcements are relatively unusual, considering the size and the importance of those two giants in the US mortgage / real estate Landscape. Various opinions have been expressed as to the usefulness of keeping dinosaurs alive where other commentators have been repeating that absent Fanny and Freddy the costs of borrowing would be substantially higher for the American households, making it impossible for the Real Estate Market to recover within a foreseeable time.

This makes wonder if the US are the only place where to invest now or if alternatives are available.

The US have invested and invented a new discipline 50 years ago: Real Estate Finance. This means that Real Estate is not only Brick & Mortar, but it is Brick, Mortar and Green Bucks, lots of Green Bucks, with the Wall Street Financial Engineered Sophistication 

Europe, particularly Paris, on the other hand has been holding strong in the real estate storm. Sales are robust, market is fueled by French and EU investors, including German, UK’s, Italians, and others, but also Middle East investors fleeing more agitated territories and… of course, the main foreign investors: the Chinese investors who from Paris to Cannes are making and channeling huge amounts of real estate investments to France

So what do we have?
1. French real estate robust market
2. International investments
3. Real Estate Finance engineered by US investors and funds
Where is the solution?
Europe could be the solution: investing in Paris with international funds and the American Real Estate Finance know how

If it is the solution, why is that that so few people are doing it?
Well, they may be discreet, even silent, but they are making it

Olivier Chazoule