Edward F. Pierzak

With softening fundamentals, a lingering public-private valuation problem, and muted property transaction activity, the U.S. commercial real estate market appears to be stuck in a period of stagnation.

In today’s economy, the pace of inflation has moderated, economic growth has remained healthy, the unemployment rate has held steady, the prospects of recession have lessened, and expectations for continued monetary policy easing have proliferated.

The tenure of the recovery from the current divergence in public and private real estate valuations is now approaching two years.

In gambling, “advantage players” use legal techniques and expert knowledge to gain a winning edge over casinos.

When it comes to property sectors, US public equity REITs are "all in" on innovation. By adapting to the changing economic and commercial real estate landscapes, REITs have moved beyond the status quo with ongoing introductions of new property sectors.

Occupancy rates are indicators of property fundamentals that reflect the interaction of supply and demand.

Leverage can be a double-edged sword, potentially amplifying investment gains on the upside and losses on the downside.

The Strategic Property REIT Execution and Delivery (SPREAD) team at Teacher Retirement System of Texas (TRS) recognized the opportunity in the current divergence and seized it with a $400 million commitment for a tactical investment in U.S. public equity REITs. The investment yielded a 17.1% internal rate of return (IRR) with $47 million in profit.