Most investors with real estate in their portfolios will own two or three different types of investments. Those different types deliver different qualities to the portfolio.

A significant proportion of the investment community owns real estate because it offers a diversification benefit against other asset classes. These are core investors who value stable cash flows and focus on the high-quality end of the market. They value diversification, like the duration quality and want the income stream. They are proponents of a balanced portfolio.

At the other end of the spectrum are investors who use real estate as a pure return enhancer. They focus on value-add and opportunistic strategies. They are attracted by the high total return and the risk-adjusted nature of those returns. They also may invest in core; risk tolerance and return needs really determine the balance between the two.

The final piece is a position in between — lower-intensity value-add that is stil