Traditionally, core assets have been kept to a low level of leverage. But that perspective is not necessarily a globally held one.

Jessica Hardman, head of portfolio management for European real estate at DWS, says there has not been a strong movement away from current average core-strategy leverage levels.

“Over the last few years, leverage for core has been quite consistent,” she says. “Core funds are typically within a 20 percent to 40 percent LTV in Europe.”

This conservatism, however, is not shared by all investors. Michael Chen, managing director at Madison International Realty, points out Asian investors have been comfortable with taking on higher leverage when purchasing assets in the United States and Europe, mainly due to currency issues because hedging is expensive.

“When I talk to some of our Asian clients investing in the U.S.,” says Chen, “they still view core as core, but maybe a U.S. pension fund would view core [leverage] as