LaSalle Study Examines Advantages of Combining Public and Private Real Estate Investments
CHICAGO (September 27, 2017) — A recent study conducted by LaSalle Investment Management (“LaSalle”) reinforces the important complementary relationship between publicly-traded global real estate securities (“GRES”) and global private real estate. The analysis, published in a recent whitepaper, highlights the benefits of GRES and global private real estate as well as the additional advantages investors can gain by combining the two strategies.
To download the full report, please visit: http://bit.ly/LaSalle-GRES-Whitepaper
Globally, real estate is one of the largest asset classes available to investors, with LaSalle estimating that global institutional real estate investments totalled $9.6 trillion as of 2016. LaSalle also cites publicly-traded GRES and global private real estate as large wealth sectors, with estimated institutional market sizes of $4.5 trillion and $5.1 trillion, respectively. Each sector offers a large universe of potential investments, strong historical and potential future performance, diversification benefits relative to equities and fixed income, and a range of risk/return strategies.
Key findings from LaSalle’s report list advantages of combining GRES with private real estate, which include:
- Publicly traded GRES are generally similar to private real estate: GRES are primarily a core strategy, with long-term return expectations similar to private core real estate with low/ moderate leverage. Although some companies engage in development and riskier property types, the vast majority of the sector is comprised of existing stabilized properties. In addition, investment strategies are available to invest exclusively in lower risk companies/approaches.
- Combining GRES and private real estate strategies is likely to generate better risk-adjusted returns than either one alone: The advantages of GRES present a strong case for investing in both publicly traded GRES and private real estate and for a larger allocation to publicly traded GRES in a real estate portfolio seeking to optimize investment performance.
Steve Ralff, Managing Director of LaSalle Investment Management Securities, said: “There are numerous ways for institutional investors to take advantage of the complementary relationship between public and private real estate. GRES can account for a meaningful portion of a core real estate allocation - both domestic and non-domestic – particularly for small and medium size institutions. GRES provides an efficient way to access non-domestic real estate as well as flexibility in managing exposure and risk across cycles.”
About LaSalle Investment Management
LaSalle Investment Management, Inc. (together with its global investment advisory affiliates, “LaSalle”) is one of the world’s leading real estate investment managers. LaSalle on a global basis manages approximately $60.5 billion as of Q3 2018 of private and public equity and private debt investments. LaSalle’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles including separate accounts, open- and closed-end funds, public securities and entity-level investments. LaSalle Investment Management, Inc. is a wholly-owned, operationally independent subsidiary of Jones Lang LaSalle Incorporated (NYSE: JLL), one of the world’s largest real estate companies. For more information please visit www.lasalle.com.
This information is based on the market analysis and expectations of LaSalle and should not be relied upon by the reader as research or investment advice regarding LaSalle funds or any issuer or security in particular. The information presented herein is for illustrative and educational purposes and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy in any jurisdiction where prohibited by law or where contrary to local law or regulation. Any such offer to invest, if made, will only be made by means of a private placement memorandum. Past performance is not indicative of future results.