Heard on the Beach: Where the Money Is

While stock picking in the real estate space garners a lion’s share of attention, superior sector allocation offers at least as much potential alpha. The number of investable property sectors has nearly doubled, and non-core sectors now comprise more than half the market. Instead of placing bets based on factors where one is unlikely to consistently outsmart the market (e.g., changes to the economic outlook), Green Street's Sector Allocation framework focuses instead on the long-term risk-adjusted return prospects of each property type. The results have been impressive in both the private and public markets.