When are core properties generally sold (assuming they aren't acquired via a fund structure with a limited lifespan)?
Does anyone know when a more conservative real estate company (like a life insurance company or certain REITs) would exit a core property? Would they wait until it's no longer a core property and then sell it to value-add and opportunistic shops?
Since you are describing assets generally held by open-end funds or REITs, there is consistent valuation and liquidity by either the external capital markets (REITs) or internal redemption (open-end funds). So there is no need to sell assets unless the fund is being severely drawn down.
They can make "strategic allocation decisions", meaning sell the asset to reinvest in different assets/markets/property classes. This can be when the property loses a tenant and it falls into value-add zone. The key is the open market is willing to pay more than the REIT or fund internally values the asset. So, if private equity groups or sovereign wealth funds for example are willing to pay crazy high amounts for core assets, funds/REITs may choose the take the cash and reinvest to get better yields. I.e. the sale is motivated by opportunistic price grabbing.
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