WASHINGTON, DC-Last week Hilton Worldwide closed on the sale of three of its properties, none of which are locally based. They were: the 740-room Arizona Biltmore Resort and Spa in Phoenix, the 780-room Grand Wailea Resort, in Maui, Hawaii, and the 796-room La Quinta Resort & Club, in La Quinta, CA. The buyer of these Waldorf Astoria Resorts – an international brand of some renown – was another international entity with a valued brand in its own circles: GIC Real Estate, the real estate arm of the Government of Singapore Investment Corporation, and one of the world's leading sovereign wealth funds.

Sovereign wealth funds, it is no secret, have been steadily building up a war chest of funds and all signs point to an unleashing this year. What may take some by surprise is the level of their wealth and the aggressiveness by which they will deploy their assets—especially as they step up their property investments.

One example is Norway's Government Pension Fund Global, which recently acquired commercial real estate in the US, including Washington, DC. For 2012, the fund returned 13% on investments—specifically, its equity investments returned 18.1%; fixed income returned 6.7% and real estate investments, 5.8%. Its allocation consisted of 61.2% to equities, 38.1% to fixed income and 0.7% to real estate. However Norway, at the end of the year, loosened the fund's investment restrictions allowing it to invest in US property markets for the first time. Observers agree will be a key player in property market investments.

Another indication comes from a survey by TheCityUK, which notes SWFs' assets will likely reach $5.6 trillion by the end of 2013 (hat tip to Reuters for reporting the survey). It is an eye-popping figure especially when stacked up against, oh let's say a country's GDP. The CityUK noted that the UK's GDP was $2.4 trillion last year, a figure slightly half of what SWFs are expected to post this year.

Washington DC is likely to be the beneficiary of some of this investment inflow; so, as Hilton demonstrated, will be DC-based companies with assets located elsewhere.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.