"CRE Net Sales by Investor Type"
2nd Qtr 2010 to 1st Qtr 2011 | Publicly traded REITs have bulked up over the past four quarters. They have acquired commercial properties valued at $22.5 billion, more than doubling dispositions totaling $10.8 billion, for a net positive inflow of $11.7 billion. This is in line with predictions made early in the financial crisis that REITs would get a head start on other investors due to early access to capital, which is what happened as they were able to raise $82 billion over the past two years through initial and secondary public offerings. Institutions were big net sellers with dispositions totaling $27.9 billion outpacing acquisitions totaling $18.3 billion for a net outflow of $9.6 billion. Institutions have been net sellers every quarter since the second quarter of 2008, most likely for various reasons at various times -- rebalancing asset allocations early in the cycle and then taking advantage of strong demand for core assets more recently. Private investors were the biggest buyers with purchases totaling $43.7 billion and also the biggest sellers with dispositions totaling $49.3 billion, creating a net outflow of $5.6 billion. Investor composition is likely to become more diversified over the next two years as more debt capital becomes available from CMBS issuance and banks, and as the improving leasing market encourages investors to consider riskier assets.