The Case for Private Real Estate

The benefits of a private real estate portfolio allocation.

Real Estate is the 3rd largest asset class in the Investable universe

  • Real estate represents $6.5 trillion of market value, 12.4% of the $52.8 trillion investable universe (See Figure 2)

Strong Current Income

  • Private real estate generate average yields of 7-10% vs. 10 Yr US Treasury at 2.3%

Low Correlation to Stocks and Bonds

  • Private real estate can provide significant diversification benefits with low correlations to stocks and bonds

A Strong Inflation Hedge

  • Apartment Landlords with short term leases can increase rents to keep pace with inflation

Low Volatility and high absolute returns compared to stocks and bonds

  • In the last 20 years private real estate values have exhibited ½ of the volatility as the S&P 500
  • Since 2000, Real Estate has significantly outperformed the S&P 500 in terms of total returns (See Figure 1)