December 28, 2007

Commercial Real Estate Still Big With Big Investors

SOURCE: The New York Times

Big investors are hungry for higher yields and hoping for a repeat of 2006's stellar returns. Seasoned money managers were caught off-guard with the rally in real estate funds.

The mounting appetite for commercial real estate from institutions like pension and private equity funds, as well as real estate investment trusts, have continued the long rally in real estate funds. Unlike residential real estate where the unsold inventory has been mounting, there is a limited supply of commercial buildings.

Big investors are pumping capital into dividend-paying REITs and have privately acquired entire portfolios of office buildings and other commercial property.

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