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Commercial Real Estate: Selecting the Right Vehicle

  • ,  Chief Executive |
  • 22 May 2018
  • Updated 08 Jun 2018

What is the best vehicle for commercial real estate exposure?

Institutional investments in real estate can take many forms. Direct property investments, separately managed accounts, REITs, CRE debt, and structured products are just a few examples.  How should investors determine the most appropriate vehicle for their needs?

Consider this list of white papers as a primer on real estate sub-asset classes, brought to you on a silver platter by the team at Savvy Investor.

Savvy Investor

Adding Flavor to Portfolios: All you need to know about real estate (UBS)
This 19-page paper by UBS Asset Management discusses the real estate asset class; the different methods of investing and vehicles available, and the benefits and challenges of different approaches to real estate investing.

A new approach to property investment (Kames Capital, 2018)
(For compliance reasons, this paper is only accessible in the UK)
Pension schemes can invest in property either by buying physical properties or via pooled funds or multi-manager funds.  Kames Capital Capital discusses the merits of a particular pooled pension fund approach.

Building Better Portfolios with Listed Real Assets (Cohen & Steers, Apr 2018)
Cohen & Steers believes that liquid real assets such as commodities and real estate securities can be attractive due to diversification benefits in a reflationary environment.

Private Equity Real Estate: A Primer (CFA Institute Research Foundation, 2018)
This overview of alternative investments contains some valuable information about real assets, including private equity real estate. Turn to p.70-92 for the relevant sections.

Cash-flow generating real assets for pension funds (Willis Towers Watson, 2017)
In today's low yield environment, tradional assets are able to provide little income. Willis Towars Watson discusses the possibility of improving cash flow health via investments in real assets on behalf of pension funds.

CRE Debt Can Be a Superfood For Any Investment Portfolio (TH Real Estate, 2018)
Certain aspects of commercial real estate debt have made it increasingly appealing to institutional investors in the US and Europe via either separately managed accounts, closed-end funds, or open-ended funds. 

Global REIT markets (EY, 2017)
Global real estate investment trust markets have grown to over USD1.7t in market cap. But even though the number of jurisdictions offering REIT products has expanded, tax laws are not efficient across the globe for real estate investment.

Social Infrastructure: Opportunities in UK & Europe (Franklin Templeton, 2018)
(For compliance reasons, this paper is only accessible in the EMEA region)
Franklin Templeton explores opportunities for investment in UK and European social infrastructure assets such as schools, housing projects, hospitals, and other civic buildings.

2018 Global Real Estate Market Outlook (CBRE)
CBRE explores real estate industry trends in 2018, including innovations such as 'coworking' spaces, as well as the outlook for the global real estate sector.

Real Estate Summary: Opportunity amidst shrinking risk premia (UBS AM, Mar 2018)
UBS Asset Management discusses how the risk premium for real estate might be affected by tightening monetary conditions, despite fundamentals being fairly supportive of real estate performance. 

THINK European Cities: Trends and tactics Q1 2018 (TH Real Estate)
Based upon recent European research, 2018 European real estate investment volumes will be in line with 2017, despite the volatility international markets experienced this February.

THINK US cities: 2018 US commercial real estate outlook (TH Real Estate)
Given the backdrop of economic growth in the US (one of the longest economic expansion in US history), the 2018 outlook for the US real estate market remains very positive.

The top alternative global asset manager rankings 2017 (Willis Towers Watson)
Section 1 of the report discusses trends and activities in alternative asset classes, such as hedge funds, private equity, real estate, and infrastructure. Section 2 goes on to list, by AUM, the Top 100 alternative asset managers worldwide.