Publications

- Feburary 1, 2009: Volume 21, Number 2

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Awaiting Opportunity: Institutional Investors Make Room for Noncore Investments

by Jon Peterson

For several years, institutional investors have been making high-return investments a more prominent feature of their real estate portfolios, but now, that strategy might take on further importance as investors look to regain last year’s losses and take advantage of the market dislocation.

Preliminary data from Institutional Real Estate, Inc.’s annual plan sponsor survey, Tax-Exempt Real Estate Investments, shows that on average, high-yield plays are on the rise. Institutional investors surveyed plan to increase their opportunistic holdings to 15.6 percent, up from 9.5 percent just two years ago, the survey finds.

California State Teachers’ Retirement System and Los Angeles City Employees’ Retirement System have already made the move from a dominant core strategy to one that emphasizes high-yield funds. Now, the $38.4

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