REITs “should be included in many institutional real estate portfolios,” according to a report from independent investment consulting firm NEPC, LLC.
“At NEPC, we believe there are many reasons for institutions to invest in REITs,” the report states. “The most compelling include the size and quality of the REIT universe, the diverse range of REIT property sectors, the long-term linkage between REIT and private real estate valuations, strong historical returns, limited exposure provided by traditional equity managers, inflation-hedging characteristics, liquidity and comparable fee drag.”
The report highlights the similarities between stock exchange-listed Equity REITs and private real estate as investments. “REIT values are dictated by property values and, therefore, REITs are real estate over the long-term,” offering similar risk and return attributes, the report states.
Boston-based NEPC serves more than 300 clients with total assets under advisement in excess of $850 billion. It is one of the largest full-service investment consulting firms in the country.
(Contact: Meredith Despins at mdespins@nareit.com)