"REITs aren't the niche investment they were 10 or 20 years ago," he told REIT.com in a video interview at REITWeek 2012: NAREIT's Investor Forum. "If you look at where REITs were at the turn of the 90s and as we came into the new millennium, money started to flow into the REITs."
He said there's much more of an understanding of REITs today and more acceptance of them as a liquid form of real estate. Prior to the 1990s he said REITs were viewed more as small cap stocks.
However, he said one of the more pressing issues has become whether or not REITs are real estate or stocks. While Pevnev said many believe the jury is still out on that topic, he commended NAREIT for its work on that issue.
"That being the case there's a lot of money flowing into REITs as a result of their view as real estate, " he said. "Even large plans that have been focused primarily on direct real estate, have been much more focused on getting REITs into the program."
Some of the key attributes of REITs that help garner the attention of institutional investors include the quality of the assets, according to Pevnev.
"If you look at the core funds that are investing in real estate, a lot of those core funds today have partners with major REITs and there's expertise that they can bring out," he said.
In terms of issues that may be of concern for investors when it comes to REIT investments, Pevnev pointed to how they are categorized in the marketplace. He said REITs are still considered a financial stock and often trade in sync with financial stocks.
"That remains an issue. When you look at the larger stock market indices, a lot of the larger cap fund managers, when they look at REITs they look at them in the same troth as banks and financial institution," he said. "So when they start lighting up on financial institutions, REITs often go out the door."