GlobeSt.com: Tell me about Praedium VI.

Appel: We're targeted somewhere between $2 billion and $3 billion for the fund. But it's really a continuation of what we've been doing historically, since 1991. Our business is focused primarily on mid-sized assets, below $75 million, assets that are underperforming their peers in the marketplace, usually with respect to occupancy rates or rental rates. They might need a capital renovation or a stronger focus on leasing or management.

GlobeSt.com: What's your hold?

Appel: It depends on the business plan for the asset. It's typically three to six years.

GlobeSt.com: Institutions are reporting that they're switching their strategies from net sellers to net buyers. Is that the case?

Appel: It's hard to define, because we're a bottom-up investor. So with us, it's identifying something that's underperforming, bringing it up to market standards and then deciding whether to sell it or not. But you're starting to see markets firm up in most asset categories and positive leasing absorption. What frustrated many people was that prices were not declining when the underlying leasing fundamentals were deteriorating. It's a very frustrating environment.

GlobeSt.com: People are saying that, when you look at the market from 30,000 feet up, office is where hotels were a few month ago in terms of ground-floor investing. What do you think?

Appel: It's too hard for me to talk from 30,000 feet up. We want to be on the ground and understand. It's easier right now because your starting to see leasing pick up and the economy is doing better. Business investment generally is improving, so you're starting to see more employment and use of office space, and you have to take into account the cost of putting tenants in. We feel better about buying today because of the fundamentals.

GlobeSt.com: So where are you looking?

Appel: We look across the US, but our biggest focus is on the two coasts. We like those markets because the have the highest economic and population growth rates and they have the most consistent liquidity. So, ultimately, when we complete our business plans, if we're looking to exit, we can do so efficiently. We've also always been an investor in Canada, but it continues to be a minor part of our investment program.

GlobeSt.com: You've maintained a relatively consistent plan in these days of alternative investments.

Appel: Markets have changed, and so your tactics have to change a little. Inner-city and infill, or workforce, housing was less of an opportunity 10 years ago than it is today. When there's an opportunity we want to jump on it, and from a tactical standpoint you have to take advantage of what the market offers you. But from a strategy standpoint, I firmly believe that if it works don't fix it. We're highly disciplined in our approach.

GlobeSt.com: So no concerns? Nothing that keeps you awake nights?

Appel: We always have concerns. This is a market with lots of liquidity and interest rates are low. For five years everyone has been worried about interest rates rising, and when it happens—and it may be 10 years from now—it will affect real estate.

GlobeSt.com: But there are no spikes or major surprises that you worry about?

Appel: You always have to be careful.