Benefits

When you combine both listed (publicly traded) and private real estate in a portfolio, you get several benefits:

Improved Risk-Adjusted Returns

• Diversification: By mixing different types of real estate investments, you spread out your risk. Listed real estate, which is bought and sold on the stock market, can be more volatile (prices go up and down quickly). Private real estate, on the other hand, tends to be more stable. By holding both, you balance the ups and downs, leading to potentially better returns without taking on as much risk.

• Market Opportunities: Listed real estate prices can sometimes be too high or too low due to quick market changes, while private real estate values change more slowly. Having both allows you to benefit from these different price movements.

Balanced Liquidity

• Liquidity: Listed real estate is easier to buy and sell, so you can get your money out quickly if you need to. Private real estate, while harder to sell quickly, gives you steady income over time. A mix of both means you have some investments that are easy to cash out and others that provide ongoing income.

• Flexibility: This combination allows you to respond better to changes in the market. For example, if the stock market drops, you can sell some of your listed real estate for cash, while your private real estate remains a stable part of your portfolio.

Balanced Volatility

• Reduced Bumps: Listed real estate can be more affected by sudden changes in the market, leading to bigger price swings. Private real estate doesn’t have these sudden changes, which can make your overall portfolio’s performance more predictable and stable.

• Protection During Volatility: When markets are unstable, private real estate can help cushion your portfolio from sharp price drops.

Enhanced Property Exposure

• More Variety: By combining both types, you get exposure to a broader range of property types and locations. Listed real estate often includes high-quality commercial properties like offices and malls, while private real estate might include residential buildings or specialized commercial properties.

• Modern and Stable Investments: Listed real estate gives you access to new and dynamic properties, while private real estate keeps your portfolio grounded with stable, long-term holdings. Together, they provide a strong mix of modern and traditional real estate assets.