Commercial real estate hit by denominator effect

06/11/2008 | National Real Estate Investor

Institutional investors may be forced to sell off a portion of their commercial real estate portfolios to maintain preset target investment allocation levels. The denominator effect is playing into the decisions. As prices of other investments fall, the percentage value of commercial real estate has risen, potentially forcing the investors to rebalance their portfolios. "By all accounts, large sums of equity capital from foreign and domestic sources remain available (to invest in commercial real estate) but appear content to sit on the sidelines for now," according to a recent research report from Prudential Real Estate Investors.

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