While the growth in target allocations remained moderate year-over-year, institutions expect to increase allocations to commercial real estate at a faster pace over the next 12 months, according to Hodes Weill Associates' Allocations Monitor.

Much of this is because institutional portfolios are under-allocated to real estate by the widest margin over the past seven years, resulting in an acceleration of capital flows to the sector.

Also on the plus side, investor sentiment increased to a nine-year high, and investors remain bullish about the opportunity to deploy capital.

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