General Electric is getting into the business of managing real estate investment for clients.
GE Real Estate, based in Norwalk, has just announced the formation of its new global investment management division. GE Real Estate has around 80 billion dollars in direct investments, and makes loans to others to buy properties, but this is the first time the company will set up funds backed by real estate as an investment vehicle. Even though the housing slump still seems to have a way to go, the conglomerate believes it can take advantage of the down market by snapping up discounted properties.
Currently two funds are planned â€“ one based on commercial real estate in major US cities, the other globally based with a focus on central Europe. Executives say they believe the current real estate downturn will end by 2010, but they acknowledge that in the meantime accessing credit may be difficult. The global investment management division will be headed by Joe Parsons, who was most recently president of GE Real Estateâ€™s North America Equity business.