For years, many institutional investors have included a strategic asset allocation to commer-cial real estate. Historically, this meant a direct investment in commercial real estate—physical property ownership, but the introduction and subsequent popularity of real estate investment trusts and listed real estate stocks has created confusion for strategic policymakers that we believe is largely unrecognized.rnREITs are publicly traded real estate companies that provide almost all investors access, albeit indirectly, to commercial real estate. The transparent tax treatment of REITs allows investors access to the same cash flow characteristics that were once available only to direct commercial real estate investors. Today, global REITs and listed real estate stocks make commercial real estate available to investors around the world. Changes in the market also create new questions for asset allocators, as the definition of real estate investing evolves.
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