Going into the new century, many institutional investors still held to the traditional 60 percent equity and 40 percent fixed-income allocation, but they sensed that their big portfolios needed to diversify into uncorrelated assets, such as real estate.

While the wisdom of such a move may have been questioned during the years of the global financial crisis, real estate has been a boon to those institutional investors who made the move and is now such an integral part of portfolios that an evolution of purpose has occurred. Real estate now contributes to a multi-asset portfolio in ways that was never intended.

By investing in commercial real estate, investors get stable income streams even in downturns, an upside of appreciation, diversification and a low correlation to other asset classes. “During the great financial crisis, all asset classes were impacted,” says Melissa Reagen, managing director and head of Americas real estate research at TH Real Estate in New Yo