In my past two columns, I wrote about some of the people who have made major contributions to the development of the Institutional Real Estate, Inc. platform since our very beginning in 1987.

If the real estate investment industry is engaged in a culture war, then the analysis you are about to read might prove to be unpopular with one side or — more likely, both sides of it. A mainstay of MSCI portfolio performance measurement has long been attribution analysis. This seeks to quantify the extent to which a real estate fund’s performance, relative to its benchmark, has been due to allocation or stock selection. The former factor involves a fund manager’s ability to be underweight in underperforming sectors and overweight in outperforming ones, while the latter is all about enhancing returns by investing in better-performing assets within specific sectors. In essence, is relative performance a function of top-down or bottom-up decisions?

While a growing number of institutional investors understand the benefits of “going green” on their bottom line and have moved to incorporate sustainability metrics into their investment decision making, obstacles to full implementation persist and vary around the world. But artificial intelligence (AI) could be a game changer in levelling the playing field and increasing sustainability in the real estate industry.