Publications

- February 1, 2013: Vol. 25, Number 2

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Building a Portfolio: Clear Objectives, Strategy and Manager Selection Are Among the Crucial Building Blocks

by Jay Nayak and Jamie Shen

The construction and management of real estate portfolios is not what it used to be. Investors face conflicting forces that must be taken into account.

On one hand, investors can benefit from historically low borrowing costs, generationally depressed new construction activity and fundamentally challenged sellers. These factors present an incomparable investment opportunity. On the other hand, threats of another global recession, political impasses and markets driven by monetary policy muddy the waters.

With these opposing forces at work, those designing portfolios must revisit the objectives for investing in real estate, evaluate the appropriateness of their objectives, and underscore timely strategies, structures and approaches that stay in sync with today’s dynamic market.

OBJECTIVES

Institutional investors look to real estate to provide competitive total returns, diver

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