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Last week I was reviewing Emerging Trends findings with a group of executives at a major public pension plan sponsor. My talk centered on how they needed to reduce performance expectations in the wake of the increasingly obvious dearth of high returning opportunities in the real estate marketplace. Sure, clever investors can and will make scores on one-off deals and development projects. But the likelihood of nailing consistent 10 to 15 percent let alone 20 percent or greater annualized returns on transactions is highly problematic given the ongoing lack of tenant demand. And the risk of underperformance remains considerable even though we are in the third year of recovery, coming out of a steep downturn.

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