- December 2009: Vol. 21 No. 11

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Real Estate Investment Declines

by Rachel Speirs

Capital investment made to commercial real estate saw a second year of declines, according to Institutional Real Estate, Inc.’s (IREI) database of publicly announced commitments. Institutional investors committed at least $5.4 billion to real estate in 2009, a 65 percent decline from the $15.5 billion of real estate commitments recorded last year. IREI tracked $17.6 billion of commitments to real estate during the market peak in 2007 and $13.9 billion in 2006. This year’s results are closer to the $9.4 billion invested in 2005.

The pullback is indicative of the continued capital strain on investors’ portfolios. Many investors have opted not to make commitments to real estate while their previous commitments remain unfunded. In addition, many investors reached or exceeded their target allocations to real estate in recent years and subsequently have slowed their quest for new investm

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