“Competitive advantage” has become something of a buzzword (even though it’s two words) in the real estate investment world. Money managers and investors alike intuitively know what it generally means — one firm believes it can do something better than another. But what does it mean specifically? What exactly are the competitive advantages that real estate investment managers tout, and why are they so important?

According to Investopedia, competitive advantages give a company an edge over its rivals and an ability to generate greater value for the firm, its clients and its shareholders. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage.

Studies of corporate value creators conducted each year by the Boston Consulting Group indicate that the best predictor of a company’s future success is a sustainable competitive advantage. While performance measures such as IR