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Institutional Investors Edge Out REITs as Top Buyers of Offices

Institutional investors overtook publicly traded real estate investment trusts as the largest acquirers of U.S. office buildings in the first quarter, a sign of widening demand that may push property prices up.

Buyers including pension funds, insurance companies and sovereign-wealth funds added a net $1.39 billion to their office-building holdings in the first quarter, compared with $1.1 billion for REITs, according to data from CoStar Group Inc. Their shift to acquisitions signals that, after being net sellers last year, they are beginning to expand their holdings.