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?

 
Most Helpful

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.  

 

Voluptatibus quod blanditiis ullam velit non. Et illum modi veritatis consectetur minus in aut a.

Repellat quia hic aut repellendus numquam fugiat. Omnis reprehenderit rem asperiores voluptas excepturi similique consectetur. Facilis minima quis quisquam eum officia.

Career Advancement Opportunities

May 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 04 97.1%

Overall Employee Satisfaction

May 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

May 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

May 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (20) $385
  • Associates (88) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (67) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Secyh62's picture
Secyh62
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
CompBanker's picture
CompBanker
98.9
8
kanon's picture
kanon
98.9
9
Linda Abraham's picture
Linda Abraham
98.8
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”