Why Invest in Real Estate?

Many individual investors have found difficulty in breaking through the barriers of directly investing in real estate and choose to invest indirectly instead. One way to indirectly invest in real estate is by purchasing shares in a REIT. Allocating a portion of your investment portfolio to a company, such as a REIT, that invests in a diversified portfolio of income-producing commercial properties and other real estate-related assets may provide you with several potential benefits, including:1

  • Potential for income
  • A hedge against unanticipated inflation
  • Portfolio diversification
  • Attractive risk-adjusted returns

Today, U.S. commercial real estate continues to produce attractive returns and the demand for prime assets remains much greater than supply.2 While we believe the U.S. commercial real estate market will continue to grow at a healthy pace, we also believe that there are additional investment and diversification opportunities abroad. Increased economic activity and wealth of international populations may produce a greater demand for institutional-quality commercial space overseas.3

The commercial real estate market doubled in just ten years, from $13.8 trillion in 2001 to $26.6 trillion in 2011. Growth in the size of global markets may be an important factor to investors considering investing in commercial real estate as growing markets may produce different investment opportunities than markets that are stagnant in size.3

1 There is no guarantee these goals will be achieved.
2US Quarterly Outlook: October 2012, Prudential Real Estate Investors. 
3A Bird's Eye View of Global Real Estate Markets: 2012 Update, Prudential Real Estate Investors.
International investment risks, including currency volatility, may adversely affect our operations and our ability to make distributions.