- January 2011: Vol. 23 No. 1

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Bright Lights, Big City: Institutional Investors Flock to Top-Tier Markets to Snatch Up Trophy Assets

by Rachel Speirs

Transaction activity picked up substantially in 2010 as debt markets opened up and the attractive yield offered by the real estate asset class lured both traditional and nontraditional investors to the market. The activity, however, has been concentrated on top-quality core properties located in a few select metros, primarily 24-hour gateway cities with economic fortitude. This flight to quality has produced a spike in prices in these prime markets and a widening pricing divide based on asset quality and location.

It’s big, it’s stable and it’s income producing. It’s core real estate, the workhorse of many institutional property portfolios and — according to recent studies by Real Capital Analytics (RCA) and other sources in the commercial real estate market — it is back in a big way.

“Core is the new black,” quips Peter DiCorpo,

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