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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,” “valueadded” and “opportunistic” styles of investing in private market real estate. This stems 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 attempts to define the asset attributes and management activities appropriate to that style. The process varies widely, and likely requires further analysis and systematization before it can be widely useful. Even then, sophisticated consultants will be required as on-going referees.
Ronald Kaiser (Sat,) studied this question.