Jeff Palma

Jeff Palma, senior vice president and head of multi-asset solutions at Cohen & Steers, was a guest on the latest episode of Nareit’s REIT Report podcast.

Palma discussed the launch of Real Assets Compass, an interactive tool designed to help institutional investors and financial advisors make informed decisions about strategic allocations to listed and private real estate.

“We feel that there's an education gap among clients, institutional and individual investors alike, about some of the benefits of real estate,” Palma said. “Despite the evidence that we have that historically real estate has positively contributed to both returns and diversification benefits in broad multi-asset portfolios, it's sort of been an under-owned asset class,” he noted.

Real estate should represent a strategic long-term allocation for most investors, Palma said. “We also think that there's a real value in real estate portfolios to holding both listed and private side by side. Really in many ways, these markets behave somewhat differently, especially at different stages of the cycle. We think that there's a role for reasonable sized allocations in portfolios along both stocks and bonds,” he added.

The Compass allows institutional investors and financial advisors to see the historical impact of adding real estate to a portfolio over the last 30 years, as well as looking forward to seeing what a portfolio with and without a real estate element might return over the next decade.

“We can also toggle the amount of listed versus private real estate. So what it really allows people to see is the sensitivity to adding more real estate to a portfolio, how much it affects returns, and how much it affects volatility,” Palma said.