This Viewpoint is the fourth installment in a series exploring the relationship between the CRE quadrants of public debt, private debt, private equity and public equity. Specifically, we will analyze the historic performance of public equity (REITs) in relation to the quadrants.

Executive Summary

• Unlike private real estate with its fixed-income-like returns, Real Estate Investment Trust (REIT) returns are more volatile.
• REIT and small cap stock returns are similar, especially regarding volatility.
• REITs’ total returns are a function of small cap stock returns, unleveraged property returns, and Baa corporate bond returns.

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1 CBRE Econometric Advisors invited Dr. Randall Zisler to co-author this paper on the real estate quadrants. His unique approach reflects a multifaceted career as a Princeton University professor, Goldman Sachs research director, pension fund consultant, and investment banker.

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