Excerpted from the article published by GlobeSt.com
With so much leverage at their disposal, large funds can afford to pay premiums to secure deals, a strategy that can mislead smaller investors into believing the market has bottomed out when, in reality, deep-pocketed players are simply outbidding the competition.
Yet, the urgency to invest may not be as intense as some believe, especially among institutional investors with long-term horizons. “There’s definitely a little bit of pressure,” said Robert Gilman, real estate practice leader at Anchin. “Eventually, we’re going to be able to buy these properties when they’re on the floor.”
Gilman explained to GlobeSt.com that many investors prefer to wait for further price drops rather than buy prematurely, especially since funds can earn modest returns by parking their cash in the meantime.