What does institutional grade mean in real estate?

Institutional Grade in Real Estate

In real estate investment, "Institutional grade" refers to properties that meet the investment criteria and standards of large institutional investors, such as pension funds, insurance companies, endowments, and REITs (Real Estate Investment Trusts). These properties are typically characterized by their high quality, prime location, significant size, and potential to generate stable and reliable income streams. Institutional grade properties often include large office buildings in central business districts, major shopping centers, industrial parks, and upscale apartment complexes. The focus on these types of properties stems from institutional investors' need for assets that provide long-term, risk-adjusted returns suitable for their investment portfolios, often with lower volatility compared to other investment types.