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Investment Styles and Style Boxes in Equity Real Estate: Can the Emerging Model Succeed in Classifying Real Estate Alternatives?

Executive Summary. The real estate industry is working to develop a system of "style boxes," with the recent NCREIF white paper seeking to define "core," "value-added" and "opportunistic" styles of investing in private market real estate. This sterns from the desire for: (1) a framework to facilitate the investment process; (2) a common language; (3) targeted portfolio strategy and balance; and (4) a simpler search and selection process for advisors. However, where style box use in the public securities industry is based on defining the attributes of a benchmark universe, the institutional real estate investment industry seeks to define boxes based on expected risk / return ranges, and then ...

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