Key Takeaways
- Institutional CRE funds range from core (6-9% return, low leverage) to opportunistic (18%+ IRR, high leverage).
- REITs must distribute at least 90% of taxable income under IRC Sections 856-860, creating high yields but capital market dependence.
- Institutional processes are rigorous but slow — private investors can exploit speed and flexibility advantages.
- The $10-15 million deal size threshold separates institutional from private opportunity sets.
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Test Your Knowledge
1.What percentage of taxable income must a REIT distribute to shareholders annually?
2.What return range do institutional core-plus CRE funds typically target?
3.Why do REIT share price declines create buying opportunities for private investors?