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DC Flows into Real Estate Solutions

By Zoe Hughes, NAREIM

Daily valued real estate funds that include private real estate offer greater diversification and lower volatility than REITs alone, delivering bricksand-mortar real estate benefits to defined contribution plans. Market volatility in 2022, combined with private real estate’s strong post-Covid performance, resulted in enhanced rebalancing needs due to the denominator effect. Managers of daily valued real estate funds experienced rebalancing outflows in 1H 2022 but are again seeing positive flows. However, investor prioritization may be an issue for new cash flows. 

NAREIM spoke with Clarion Partners, JPMorgan Asset Management, PGIM Real Estate and Principal Real Estate Investors to get a realtime pulse of the DC market, as well as to understand DC real estate appetite in times of market stress and manager considerations surrounding liquidity and rebalancing. 

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