Private real estate has been widely accepted as a distinct asset class by institutional investors for decades. But the industry still has a hard time determining what to do with public real estate. A pending change in the somewhat arcane Global Industry Classification Standards, however, will better define public real estate, with potential ripple effects for private real estate, as well.

Introduced in 1999 by S&P Dow Jones Indices and MSCI, GICS is the leading global framework for classifying stock investments. There have been no top-tier changes since the system’s inception, and since inception the real estate industry has been a subsector of financials. In a major milestone, however, this changes Sept. 1, 2016, when GICS will reclassify real estate as the 11th top-tier sector.

Possible implications of the GICS change can be seen in three areas: First, what this change generally means for the real estate asset class. Second, how the change may affect real estat