What Pension Funds Need To Know About Commercial Real Estate
I was recently at a dinner party where I had the opportunity to talk with a New York City teacher, who kept pretty good tabs on her pension fund’s performance. She was worried about if, when the time came, there would be enough to fund her retirement and asked me point blank, “Where should we be investing?”
Without hesitation I said, “Commercial real estate.”
Historically, in order to protect assets, pension funds would invest in safer, low-risk products. Yet recently, pension funds have played on the risk spectrum as yields compress in their traditional asset classes. We have noticed increased inquiries from both pension fund advisors and asset managers asking about increasing allocations into real estate. And the trend has only picked up in the last 12 months.
A 2018 study from PREA, as reported by National Real Estate Investor, showed that during the next two years, 56% of global pension investors expect to increase their real estate investments to about 10% of their total capital allocation. The study also found that pension fund investors intended to commit at least $60 billion to real estate globally in 2018.
Read more @Forbes
