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Question

You are the investment officer in state pension fund. You have 100 millions to invest in following investment

opportunities:


-Office building in CBD that can be purchased at an unlevered 5% capitalization rate. The property is "in transition" with one-third of the leases expiring within two years and another third in five years.


-A portfolio of CMBS bonds issued in 2019 with the bonds maturing over various terms depending upon tranche.


-A secondary stock offering for a large retail REIT (rated Baa1) with a diversified portfolio by geography and tenant throughout the USA.


Please provide pros and cons of each investment opportunities: office building in CBD, CMBS bonds, REIT.

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