After remaining flat for two consecutive years, institutional target allocations to real estate are expected to decrease in 2025, according to the 2024 Institutional Real Estate Allocations Monitor, the 12th annual published by Hodes Weill & Associates and Cornell University’s Baker Program in Real Estate. Target allocations held at 10.8 percent in 2024, with institutions expecting to lower targets by an average of 10 basis points next year in favor of other allocations, including private credit and infrastructure.
Following an eight-year period when institutions were underallocated to real estate by an average margin of approximately 100 basis points, institutions faced overallocation issues in 2023, as roughly 39 percent of institutions reported being overallocated. The continued strong performance of public equities, which achieved multiple highs during the past 12 months, coupled with further write-downs in real estate portfolios from 2022 peaks, has result
