- November 1, 2015: Vol. 2, Number 11

To read this full article you need to be subscribed to Real Assets Adviser

Risk & Reward: Should real estate investors shoot for bigger returns by taking on more risk at this stage in the cycle?

by Chris Macke and Stanley Iezman

To get the right answer, you first have to ask the correct question. Today, investors are asking whether the commercial real estate market is at peak asset pricing or, more directly, whether asset prices can only go down from here. But shouldn’t we really be asking, “Is now the time in the market cycle to be taking on more risk in the pursuit of short-term gains?” Conventional wisdom today seems to be to prioritize maximizing returns at the expense of risk control. We believe, however, maintaining an equal focus on return potential and risk control will result in more favorable outcomes, especially in the core space. This conclusion is arrived at based on the following factors, one of which includes pricing levels:

• The role of real estate in a multi-asset portfolio

• The current investment environment

• Actual returns versus required returns


Private commercial real estate has a dual mandate within a larger p

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?