REIT Resources

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Real Estate Cap Rates, Appraisals, and the “Ostrich Effect”: A comparison of REIT implied, ODCE appraisal and ODCE transaction cap rates

  • Part 1 (summary)
  • Part 2 (office, industrial, retail, apartments)

Drivers of Listed and Unlisted Real Estate Returns: This 2023 paper by Norges Bank Investment Management (NBIM) analyzes the drivers of U.S. public and private real estate returns and evaluates real estate exposures in the context of a diversified investment portfolio. The differences between listed and unlisted real estate appear to reduce over the longer term, where the return correlations between the two segments increases with horizon.

Comparing the Performance of REITs, Unlisted Real Estate, and Other Pension Plan Investments: CEM Benchmarking© Study: Link to the 2023 update of a paper in connection with the study by CEM Benchmarking (“CEM”), an independent provider of benchmarking information for institutional investors.  This research examines fund performance and capital allocations for more than 200 public and private pension funds over the 24-year period 1998-2021.  The study found that listed Equity REITs provide optimal exposure to the real estate asset class.

The Role of REITs in Real Estate Allocations: This 2023 paper co-authored by Singapore sovereign wealth fund GIC and DWS explores two important roles that REITs can play in an institutional investors’ portfolio:  Strategic and Dynamic Allocations.

Hodes Weill 2023 Allocations Monitor: 2023 version of Hodes Weill’s annual institutional real estate “Allocations Monitor”, which includes data on how REITs can complement to private real estate in overall portfolios in terms of filling allocation needs and addressing liquidity objectives.  Hear a podcast of Douglas Weill sharing highlights of the results here.

REITS “Complete” Real Estate Portfolios: Winter 2023 PREA Quarterly article authored by Nareit’s SVP of Research Ed Pierzak on how REITs can help investors achieve their real estate investment objectives by offering relative value opportunities, complementing existing portfolio allocations through broader diversification and ESG enhancement, and improving overall portfolio performance.

Role of REITs in Institutional Real Estate Portfolios (podcast): Listen to Christian Busken, Head of Real Assets Research for institutional consulting firm Fund Evaluation Group (FEG), describe how his team structures real estate portfolios for its clients and where and why REITs play a crucial role.  Over the course of his two-decade tenure at FEG, Christian has observed how the REIT universe has evolved.   He also shares highlights of the process FEG uses to screen real estate investment managers and what attributes are important. May, 2023.

IREI Special Report “Investing In REITs”: March 2023 special report on REIT investing published by IREI.

How REITs deliver access to the new economy: Link to a paper produced by FTSE Russell about how REITs may be used as part of a portfolio completion strategy.  The growth and evolution of the REIT sector has given rise to an important new dimension of portfolio diversification. The REIT universe has expanded greatly beyond the property sectors institutional investors traditionally own—Retail, Office, Residential and Industrial (RORI). Over the past decade, new property types have been introduced and have grown rapidly. Today, the property types outside of RORI account for half of total market capitalization. Of special interest are REITs that invest in real estate that supports the rapidly growing technology sectors of the global economy.

REITs and Private Real Estate as Complements:  The City of Austin’s (TX) Portfolio Completion Strategy (Podcast): Link to a 2020 podcast interview with David Veal, then the Chief Investment Officer of the City of Austin’s (COAERS) pension fund and currently the CIO of Texas ERS, who describes how the City’s pension fund implemented a portfolio completion strategy using REITs.  Here is the link to the 2023 update on COAERS’ progress with David Stafford, Deputy CIO.

Private Equity Real Estate Fund Performance: A Comparison to Listed REITs and Open-end Core Funds (whitepaper): Link to a 2021 white paper comparing private equity real estate (PERE) fund performance with REITs over matched investment horizons.  The authors are three academics from the University of Florida (David Ling, Andy Naranjo, and Tom Arnold).  Tom Arnold was also the Former Global Head of Real Estate of the Abu Dhabi Investment Authority (ADIA).  The study examines 375 U.S. and 255 international private real estate closed end funds with vintages from 2000 to 2014 and found that REITs outperformed PERE funds:

  • In the US, REIT returns exceeded PERE risk-adjusted returns by 590 basis points, on average; and won 68% of head-to-head matchups on a risk adjusted basis. 
  • In global funds, REIT returns exceeded PERE risk-adjusted returns by 619 basis points, on average; and won 67% of head-to-head matchups on a risk adjusted basis.

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  • REITweek: June 4-6, 2024, New York, NY. Nareit’s signature event that provides an opportunity for qualified investors to meet with and attend presentations by REIT management teams
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