Susan Hudson-Wilson, CFA
Chief Executive Officer Property & Portfolio Research, LLC
This chapter covers the real estate asset class. It focuses on the investment and capital market aspects (the supply of and demand for the investment) and not on the space market aspect (the supply of and demand for space to lease) of real estate.1 Real estate comprises one-third of the value of global capital assets and represents approximately $10 trillion of value in the United States alone. Of this $10 trillion, approximately $3 to $4 trillion falls into the category of commercial and multifamily investment-grade real estate, which excludes farmland, timber, raw land, hotels, and owner-occupied residential real estate. Hotels, farmland, timber, and raw land are sometimes included and sometimes excluded from institutional investors’ definition of real estate, but for simplicity they are not discussed in this chapter. Owner-occupied residential real estate is a separately studied class of investment.
The commercial and rental residential real estate property types covered are as follows: