Dividend Capital
Why Real Estate?
Over the years, investors have come to understand the critical role that diversification plays in creating an efficient investment portfolio. With recent challenges in the market, many investors are considering other investment options, such as real estate.
With an approximate market capitalization of $10.1 trillion1, U.S. commercial real estate could be a valuable component of an investment portfolio, offering the potential to provide:
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Attractive current income/inflation hedge |
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Competitive total return |
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Improved portfolio diversification |
Because of these potential benefits, many investors now consider real estate to be the "fourth asset class," in addition to stocks, bonds and cash. Today, access to the "fourth asset class" has expanded dramatically into a meaningful and mainstream asset class through the availability of investment vehicles such as real estate investment trusts (REITs) and real estate mutual funds.
1 Source: Pension & Investments, October 30, 2006 and Prudential Real Estate Investors, December 2006.
Investing in real estate entails certain risks, including changes in: the economy, supply and demand, laws, tenant turnover, interest rates (including periods of high interest rates), availability of mortgage funds, operating expenses and cost of insurance.