When the tide is rising, it’s relatively easy to generate good returns. All boats are being raised at the same time. It’s judgement day when things go sour. There is no magic in leverage. With an interest rate differential you can increase your return on capital. However, banks will come knocking when property values go below the amount of debt. Also, one will be in a very different negotiating position, if he can sit out vacancies or project delays. In order to protect wealth over cycles there needs to be a comfortable equity cushion.

Judging risk in real estate investments is far more complex than an uninitiated observer might believe. And getting it right is tantamount to protecting wealth.

On the growth side there is optimization of the existing portfolio. That entails adding to buildings, renovating for better rents, leasability or sales, negotiating favorable contracts. And then there is dispositions, acquisitions and development to create new return and capital appreciation potential.