I'm back at One Madison in New York, and in today's Clarion Calls video, I am going to walk through the differences between public and private real estate as an investment in your portfolio.
Two investors both own real estate in their investment portfolio.
One watches the value of that investment change every second. The other does not.
Same asset class. Completely different experience.
That is the distinction between public and private real estate.
Public REITs trade on an exchange. They offer liquidity and easy access. Prices can move with market sentiment. Additionally, many public REITs focus on a single property type.
Private real estate works differently. It can provide diversification across property types and markets, and its value is generally tied more closely to the underlying buildings and their operating performance.
Historically, that has contributed to attractive income, lower reported volatility, and relatively low correlation with stocks and bonds.
This does not mean one is always better.
Public REITs can be a liquid, tactical allocation.
Private real estate can be a strategic, long-term allocation designed around income, diversification, and stability.
And private real estate, once difficult for individual investors to reach, is becoming increasingly accessible.
It may be time to look beyond the public market ticker.
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