Sector allocation is increasingly important for commercial real estate investors, which begs the question — should core real estate investors contemplate more diversification into the alternative sectors? Harrison Street in its recent report, examines this question because when viewing sectors, the traditional property types — the office, industrial, retail and apartment sectors — have faced new challenges. In particular, the office sector has struggled following the pandemic-induced rise of remote work, which has heavily slowed demand for space and produced rising vacancy rates and an unclear outlook for future demand. Retail has faced headwinds alongside the rise of ecommerce and an oversupply of space devoted to physical retail. The apartment sector has cooled due to softening rent growth following the pandemic. Additionally, many investors are seeking to reduce exposure to the industrial sector, which saw meteoric returns in recent years and is at risk of mean reversion if
