Why Do Most Pension Funds Hold More Office Than Any Other Property Type?
- Topics:
- Commercial Lending
- Tags:
- Business Operations,
- Institute For Fiduciary Education,
- Microsoft Office,
- Office,
- Pension Fund,
- Real Estate
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Overview: Perfect knowledge would have meant knowing that office, throughout the multi-cycle period, would turn out to be the riskiest of the major property sectors with the worst pay off for assuming risk compared with the other real estate sectors. This paper presents data showing risk has declined, although investors understand office remains the riskiest of the major property types. Underlying office space supply and demand trends suggest office fundamentals may not be as volatile in the future, which should cause aggregate office returns to be lower, but also somewhat more stable, than in the past. Considering that office assets still present several compelling and differentiating characteristics, comparatively significant allocations to office may be more justified going forward than they were in the past.
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Format: PDF | Size: 969KB | Date: Jan 2003 | Pages: 6
