Quality and quantity: You can have the best of both worlds. Real estate investors need numbers, and they need someone to crunch them
The growing number of real estate benchmarks has played an essential role in making real estate a more investable asset class. High-quality data is not only seen as the basis for making real estate more transparent, but also as an important tool for communicating with stakeholders — including regulatory authorities. The availability of more and more benchmarks also means that asset managers and investors have to be more careful in choosing the right one for their purposes. Experts agree that benchmarks shouldn’t be used on their own as a headline number, but rather as a prompt for insight into reasons for over- and underperformance, whether at strategic or tactical levels.
“For equities and bonds, benchmarks are used all the time,” says Peter Hobbs, senior director at IPD. “For real estate, they’re used more and more.” Hobbs thinks that the increase in the use of real estate benchm