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Investment Strategy

Case Studies & Other Resources

 

Investment Strategy

the opportunity for increased institutional investment in public real estate

by Roy Schneiderman and Michael McGowan,Real Estate Issues, February 2018

Although investment in public real estate has surged over the past decade, institutional investors remain hesitant to fully embrace public real estate. This article examines how changes in public real estate alleviated some traditional areas of concern such as measures of volatility and correlation with the broader stock market. We conclude that institutional investors should undertake a fresh examination of REITs and their potential role in overall real estate portfolios.

Churn, Churn, Churn?: Or is “Buy and Hold” for the Byrds?

by Roy Schneiderman and Oliver Cowan, Institutional Real Estate Americas, July/August 2017

How much better does a new investment need to perform to justify the costs of selling one asset and purchasing another? We offer some analysis and examples.

A Big Shift: The Impact of GICS Changes on Institutional Investment in Real Estate

by Roy Schneiderman and Michael McGowan, Institutional Real Estate Asia Pacific, October 2016

Schneiderman and McGowan explain the implications of the new Global Industry Classification Standards for the real estate asset class, real estate capital flows, REITs, and institutional management of real estate investment portfolios.

Making Sense of Before- and After-Fee Rates of Return

by Dean Altshuler, PhD, CFA Institute Magazine, July 2016

If time-weighted rates of return tests are factored into an incentive fee calculation, then large overpayments are likely when using the industry-favored approach for accruing incentive fees. Altshuler explains how to properly account for manager fees when using a time-weighted rate of return and notes that if incentive fees are based upon time-weighted returns, manager overpayments are possible.
 

One Way Not to Align Interests

by Roy Schneiderman, Institutional Real Estate Americas, December 2015

Why are investments often evaluated on a time-weighted return basis when incentive-fee structures are based on IRRs? Schneiderman explains the ins and outs of why time-weighted returns are not a good metric for incentive-fee structures.

Time-Weights for No One: Investors' Focus Should be on Current Income, Not Unrealized Gains

by Roy Schneiderman, Institutional Real Estate Letter, July/August 2015

As life expectancy increases and job growth slows, pension funds require more cash flow. Increased focus on benchmarking and time-weighted returns has favored appreciation in real estate investments, but given real estate’s capacity for generating cash flow, cash flow should be an objective of all real estate allocations.
 

Risk-adjusted Returns: Like Potter Stewart Said, ‘You Know It When You See It’

by Roy Schneiderman, Institutional Real Estate Letter, December 2014

What does “risk-adjusted returns” mean in real estate and is it quantitative or qualitative? Schneiderman deconstructs what real estate professional mean when they use the term in both individual deals and discrete investment strategies.
 

It Used to be Simple: Investors' Economic Motivations have Gotten Complicated

by Roy Schneiderman, Institutional Real Estate Newsletter, September 2014

Real estate investors are more varied, complex, and multi-faceted than they used to be and investment managers must understand their objectives. Schneiderman offers a synopsis of real estate investors’ motivations in today’s market.
 

Assessing Manager Operational Risk: Up-front Analysis Pays Off on the Back End

by Faye Beverett and Roy Schneiderman, Institutional Real Estate Letter – North America, June 2012

Beverett and Schneiderman argue that institutional investors are overlooking key operational aspects in their manager due diligence and that in-depth operations reviews of asset decision-making procedures, investment vehicle back-office systems, and major internal decision processes pays off in the end.
 

Investment Manager Co-Investment: Does Co-Investment Really Help to Align the Interests of Investors and a Manager?

by Roy Schneiderman, Institutional Real Estate Letter – North America, April 2011

While requiring manager co-investment in institutional real estate ventures may sometimes serve to align manager and investor interests, this is not always the case. Here, Schneiderman explains when co-investments have negligible impact, when they create misalignment, and when they are beneficial.