This study explored the investment thesis that micro assets outperform macro assets. Micro assets are defined as office and industrial real estate assets acquired at a price between $1 – $10 Million. Assets acquired at a price greater than $10 Million are defined as macro assets. The study used a data sample of 1,025 office and industrial real estate asset transactions collected from the databases CompStak and Co-Star.  Data was collected from 1993 to 2016, representing approximately 38 cities across different market tiers.

The results obtained from the analysis, with a 90% confidence level, showed that micro assets yielded an 8.76% higher IRR than macro assets.  Similarly, the analysis found, with a 99% confidence level, that the change in value of micro assets is 15.97% higher than macro assets.

Note: Investment sales have comprised 38% of the total BARBERMURPHY volume in 2017 and 2018.

 

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