Institutional investors regularly tell us what a difficult time they have finding good investment management firms. What they really mean is that they are having a difficult time finding good managers who understand what it means to be a good service provider.

That is because, operationally, the investment management firm is really two businesses. One is a real estate investment business; the other is the investment management business.

The real estate investment business has been around for generations — often it was a family business and only became institutionalized in the past 50 years. Professionally managed, it is an operating business focused on buying assets at the right price, establishing a budget and business plan, managing and leasing, and keeping its focus on daily operations and the tenants.

The investment management business, which started as a capital markets busine