BY ERIKA MORPHY
On a mid-August morning, the yield curve inverted—that is, yields on two-year Treasury bonds were higher than those on the 10-year bonds, for a short period of time.
As brief as the inversion was, the stock market shook and
rolled as economists warned that recessions typically follow 18
to 24 months after this type of yield curve inversion.
Of course, the yield curve has been steadily declining since
January 2014 and other portions of it have inverted in recent
months, such as the 10-year/three-month yield curve. However,
these developments did not set off widespread alarm bells like the
inversion of the psychologically significant 10-year/two-month
piece. In truth, this event was just one more reminder that we are
at the end of both a real estate and larger economic cycle. And
after that? A recession will likely follow.
We even know what that recession will probably look like: mild
and short-lived, based on current projections.
What many of us may not know is how to handle the waiting
period between then and now. What investments and developments are safe for the duration? This was among the topics discussed at the recent 23rd Annual Transwestern Real Estate
Forum Institutional Insurance Investors Symposium. There, a
roundtable of seven panelists gathered to discuss industry trends
and perhaps more importantly, what they are investing in and
developing right now.
A CLOSE UP VIEW OF
THE END OF THE CYCLE
Participants in Transwestern’s and GlobeSt. Real Estate Forum’s
Institutional Insurance Investors Symposium talk about what
investments they are making as the cycle’s end looms.