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Institutional Perspectives on Real Estate Investing: The Role of Risk and Uncertainty

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Author Info
William N. Goetzmann () (Yale School of Management - International Center for Finance)
Ravi Dhar () (International Center for Finance at Yale School of Management)

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Abstract

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.

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Publisher Info
Paper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm457.

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Date of creation: 15 Jul 2005
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Handle: RePEc:ysm:somwrk:ysm457

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Web page: http://mba.yale.edu/
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Related research
Keywords: Behavioral Finance; real estate; investing; risk; uncertainty;

Find related papers by JEL classification:
R33 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets
G0 - Financial Economics - - General
G23 - Financial Economics - - Financial Institutions and Services - - - Pension Funds; Other Private Financial Institutions

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  1. Jim Clayton & Greg MacKinnon & Liang Peng, 2008. "Time Variation of Liquidity in the Private Real Estate Market: An Empirical Investigation," Journal of Real Estate Research, American Real Estate Society, vol. 30(2), pages 125-160. [Downloadable!]
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