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Blending in: Including active REITs in a real estate allocation can offer benefits for investors
Increasingly, investors are turning to REITs to optimize and enhance exposures in real estate, one of the cornerstones of a real asset allocation. Today, more than 64 percent of the world’s largest real estate investors are choosing to invest in REITs within their real estate allocations, according to Nareit, as of December 2022. REITs can introduce valuable liquidity, the ability to capitalize on mispricing, a history of higher returns and outsized exposure to next-generation properties. Listed real estate can complement the income, downside protection and diversification benefits of private exposures. Just as an alloy is stronger than its base metals, a mix of listed and private can lead to superior characteristics in a portfolio, including the potential for stronger risk-adjusted returns.
Listed real estate is real estate
Listed and private are two sides of the same market representing approximately $38 trillion in value. With access to similar or