The expansion of core real estate portfolios to include alternative property types marks a significant evolution in the NCREIF Fund Index — Open-end Diversified Core Equity (NFI-ODCE).
The inclusion of alternative property types within core real estate portfolios is gaining significant momentum. Alternative property sectors — such as senior housing, student housing, life sciences and self-storage — offer compelling characteristics that align closely with the core principles of a diversified portfolio. These property types exhibit favorable attributes like strong rent growth, low volatility and robust demand drivers, all of which enhance the overall diversification and stability of a portfolio.
But in the post-pandemic era, concerns about valuation and performance have seen investors heading toward the exits, and redemption queues have become substantial.
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