Institutional Perspectives on Real Estate Investing: The Role of Risk and Uncertainty
Yale School of Management - International Center for Finance
William N. Goetzmann
Yale School of Management - International Center for Finance; National Bureau of Economic Research (NBER)
Yale ICF Working Paper No. 05-20
In this paper we address the factors influencing the institutional decision to allocate resources to real estate. We survey a sample of major institutional investors via a web questionnaire. They were willing to answer questions about their target real estate allocation, their plans to increase or decrease their allocation, the major reasons for investing in real estate, and views on the major risks and relative expense of doing so. We find that the endowments in our sample typically had a relatively short history of real estate investment, but planned to increase their allocation to the asset class - more so than pension funds. We also find uncertainty about use of historical data to be a significant factor in the allocation choice.
Number of Pages in PDF File: 35
Keywords: Behavioral Finance, real estate, investing, risk, uncertainty
JEL Classification: R33, G0, G23working papers series
Date posted: June 8, 2005
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