Institutional investors typically build real estate portfolios by making allocations across several dimensions, including strategy (core, value-added and opportunistic); geography (global regions, country, region, metro, suburb, city); sector (residential, office, retail, industrial, healthcare, niche, etc.); real estate quadrant (equity, debt, public REITs, CMBS); and vehicle (open-end funds, closed-end funds, funds of funds, joint ventures, club deals, separate accounts, direct holdings, ownership stakes in REOCs).

Institutions generally start with higher portfolio weights toward their home country/region, core strategies, commingled vehicles and private equity real estate, though some use public REITs for liquidity and ease of execution, treating public REITs as a proxy for private real estate. They often spread investments across multiple sectors and geographies. Decisions may be outsourced to fund managers until the institution gains internal expertise and has available