“Riches in niches."
In the context of portfolio diversification, direct real estate investing is still considered an “alternative” to stocks, bonds and cash. Actually, “alt” is a fair characterization, given the investment’s illiquidity, low transparency, longer hold periods and high complexity, but for people who do it all the time, the label can feel diminishing and inaccurate.
Funny enough, within the real estate universe, we have our own “alts,” or what are referred to as non-institutional property types. These assets typically fly under the radar of traditional, large-scale investors, but research from Clarion Partners shows they are significantly less sensitive to changes in GDP and have, on an absolute and risk-adjusted basis, outperformed traditional real estate sectors in good and bad markets.1
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