Advice Pool - Real Estate

Last year’s acquisition by the Blackstone Group of Equity Office Property Trust for USD 36 billion was the largest buy-out ever of an owner of office

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

buildings. More importantly, it signaled that the commercial property market is healthy, now more than ever, and that is not afflicted by the same ailments so characte

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

ristic of the residential markets, much less by bubbles of any color, shape or form.

Albeit the biggest deal ever, Blackstone’s move was one of the many transactions

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

eading to the privatization of the commercial property markets, a trend that since then has seen some USD 100 billion change hands and disappear from public ownership

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

both in the United States and Canada. Today’s property barons can borrow against the value of the assets and use the cash-flow from rental income to meet the interest

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ayments. With property values rising fast, they can afford to strike any deal they want.

This Monopoly-like craze is not confined to America. Just as bonds, stocks an

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

d shares are freely traded across borders, so is ownership of commercial property assets. Monopoly goes global!

The Bank of Canada reports, for example, that cross-bo

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

rder commercial and office property investment worldwide hit USD 290 billion in the first half of 2006 – a 30 percent increase over the same period in 2005. In the pro

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ess, once obscure markets have been swept into the mainstream. Take the Euro Zone, for instance. Practically all new entrants into the European Union have benefited fr

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

om the convergence of Western investors looking to snatch up buildings at rock-bottom prices. Bulgaria is the latest example of this trend.

Commercial real estate is

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ll part of the same ‘search for yield’ trend that has seen investors hunting around the globe for other high-income assets. It is all part of globalization and governm

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ents – especially Western governments – see it in a positive light. Because of this the gap between yields on the highest-quality properties and the second-tier sites,

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

especially those located in what used to be second-tier nations, has narrowed everywhere.

Commercial property is a hybrid asset. It offers high yield, giving it bond

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

like characteristics. And moreover like shares and unlike bonds, investors can expect that yield to grow, at least in line with inflation. Enthusiasm for the sector wa

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ned in the 1980’s and 1990’s because of fat Stock Market returns. In this day and age, however, pension funds are desperate to diversify from shares and bonds, and com

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ercial property is benefiting from capital being diverted by investors from the Stock Exchange.

Not everything is rosy, though. The catch is the lack of liquidity. It

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

takes time and know-how to buy and sell a building, especially in farfetched places, and recruiting and managing tenants as well as maintaining and up-keeping those b

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

uildings involves an organization all by itself. So as the market develops, investing becomes more and more sophisticated.

The key to the growth of the commercial pro

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

erty markets and their widespread globalization has been the ever-increasing development of REIT’s or Real Estate Investment Trusts. These are companies quoted in the

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

Stock Market that bundle together portfolios of buildings, allowing investors to buy and sell whenever and wherever they wish.

Luigi Frascati

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Advice Pool - Let's Play Monopoly

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