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Pension Funds May Cut Commercial Real Estate Allocations

From sister publication NREI comes an insightful analysis of institutional investors, which includes the tidbit that many advisers may be telling pension funds to cut back on their commercial real estate allocations.

“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 Parsippany, N.J.-based Prudential Real Estate Investors. The report also notes that core funds are seeing more withdrawals as more pension funds grapple with over-allocations to real estate caused by the sharp downturn in the equity and bond markets over the past year. “It's been a long time since core funds had queues of investors trying to get out, but the risk that many of the large open-end commingled funds will be in such a position by year-end has increased.”

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