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WESTPORT, CT—Real estate investment advisors are skilled atforeseeing and adapting to changing conditions in markets that canaffect property yields. It remains to be seen how well firms willadapt to evolutionary change of another sort: Traditional capitalsources are facing long-term decline, and the investor typespicking up the slack have different ways of approaching the market.To thrive over the long term, investment managers must developsystems for serving new client types, without abandoning theirstill-active client base in the process.

Demand for investment-grade commercial property is strong andgetting stronger. Institutional capital allocations to US realestate investment are increasing at a rapid pace, as pension fundsseek core and opportunistic investments across an expanding rangeof property types and cities.