The global balance sheet crisis will be driving economic decisions for the next ten years.  As the Boston Consulting Group recently wrote, “Either the politicians need to organize a systemic debt restructuring for the Western world… or we run the risk of the situation spinning out of control. In which case there will be no place to hide (italics added).“

As commercial real estate investors, we need to anticipate that sovereign debt issues in Europe, the United States, and Japan coupled with American consumer, student loan, bank, CMBS, and mortgage debt may result in a Lehmanesqe financial crisis.  While we hope the next two years will be uneventful, it is imperative to prepare for another liquidity crunch.   

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