Investors shift focus to high-yield real estate

Institutional investors are shifting their focus toward higher yielding real estate funds, according to the Real Estate Institutional Investor Trends for 2016 Survey from Probitas.

The survey found 84 percent of respondents are either totally focused on value-add real estate or consider it a strategic part of their program in 2016, up from 62 percent in the previous year. Furthermore, the amount of investors completely focused on core-plus strategies increased from 0 percent to 10 percent over the same time period.

These increases came with a corresponding decrease in interest in core opportunities, with only 14 percent of respondents totally focused on core strategies, down from 22 percent in the previous year.

Opportunistic funds have continued to receive the most fundraising, gobbling 47 percent of the fundraising pie in 2015, according to the Probitas survey, the highest percentage of any strategy by a wide margin.

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