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Cornell University’s Baker Program in Real Estate and Hodes Weill & Associates are pleased to present the findings of the 11th annual Institutional Real Estate Allocations Monitor (the “2023 Real Estate Allocations Monitor”). The 2023 Real Estate Allocations Monitor focuses on the role of real estate in institutional portfolios, and the impact of institutional allocation trends on the investment management industry. Launched in 2013, the Real Estate Allocations Monitor is a comprehensive annual assessment of institutions’ allocations to, and objectives in, real estate investments. This report analyzes trends in institutional portfolios and allocations by region, type and size of institution.


The 2023 Real Estate Allocations Monitor includes research collected on a blind basis from 175 institutional investors in 25 countries. The 2023 participants hold total assets under management (“AUM”) exceeding US$10.2 trillion and have portfolio investments in real estate totaling approximately US$1.1 trillion. Our survey consisted of 27 questions concerning portfolio allocations to the asset class, current and future investments in real estate, investor conviction, investment management trends and the role of various investment strategies and vehicles within the context of the real estate allocation (e.g., direct investments, joint ventures and private funds). We also included questions regarding historical and target returns as well as environmental, social and governance (“ESG”) policies. 

Media Coverage

  1. Institutions are maintaining their allocations to real estate, holding target allocations flat year-over-year. Institutions held average target allocations at 10.8% between 2022 and 2023. This marks the first time since 2013 (the launch of the survey) that institutions have not reported an increase in target allocations. Overall, target allocations are up 190 basis points since 2013, representing an increase of over 20%.

  2. While the majority of institutions are at or over target allocations to real estate, portfolios are beginning to come into balance as the denominator effect abates. Nearly 40% of 2023 survey respondents report being overallocated to real estate, in comparison to 32% in 2022 and less than 9% in 2021. Institutions responding to the survey after the first of September reported being underallocated by an average of 70 bps, following a rebound in public equities and continued write-downs in real estate portfolios.

  3. After declining in 2022, investor conviction is on the rise, as institutions begin to focus on the potential to take advantage of a favorable investment environment over the next several years. Institutions reported an increase in conviction to 6.4 points, marking the second highest level of conviction over the past eleven years. Investors are starting to deploy capital to select opportunities, though remain cautious, citing concerns relating to further devaluations as interest rates remain higher for longer, and uncertainty regarding macro-economic fundamentals, including the potential for a recession. Institutions believe the next few years will prove to be good vintage years for deploying opportunistic capital.

  4. Real estate portfolio returns, while still outperforming long-term average target returns, moderated in 2022 and are expected to decline significantly in 2023. After returning 17.1% in 2021, real estate portfolios generated an average return of 9.5% in 2022, compared to an average target return of 8.5%. Institutions anticipate real estate portfolio returns will continue to decline, with a potential for negative returns in 2023, as private portfolios, including fund NAVs, are written down to market.

  5. Contending with overallocation, institutions continue to show a strong preference for reallocating capital to existing manager relationships. Approximately 64% of 2023 investments are expected to be allocated to existing manager relationships. Emerging managers continue to be at a disadvantage, with a nominal 11% of institutions willing to invest with first-time fund managers in 2023, compared to 16% in 2022.

  6. Investors continue to favor value-add strategies, led by institutions in the Americas. A strong appetite for high-return strategies continues to be the trend, with more than 25% of institutions expecting to invest more capital in both opportunistic and value-add strategies, compared to approximately 10% with respect to core and core plus. Across the globe, investors are showing an increased appetite for credit strategies, with 34% of survey respondents noting they are planning to invest more capital in real estate debt, up from 14% in 2022.

  7. The United States remains the preferred destination for capital allocations from both North American and international investors, and institutions are planning to increase cross-border investments. Approximately 89% of institutions are actively investing in North America, followed by 73% in continental Europe, 65% in the United Kingdom and 41% in Asia. Notably, after retrenching and turning their focus to domestic strategies, institutions are planning to increase cross-border investments; approximately 91% and 71% of institutions in APAC and EMEA, respectively, expect to be active in allocating to North American-focused strategies over the next 12 months.

  8. Despite a sluggish fundraising environment that has persisted since 2022, over 80% of institutions report that they are now actively considering investments in funds. Institutions in the Americas continue to have the greatest appetite for funds, though notably 40% of APAC-based institutions expect to invest more capital into closed-end funds over the next year.

  9. Institutions consider REITs to be a complement to private real estate in overall portfolios in terms of filling allocation needs and addressing liquidity objectives. REITs and other real estate public equities are an increasingly important component of institutional portfolios, with approximately 84% of institutions that actively invest in REITs including REITs as part of their real estate allocation. Institutions report they are planning to increase their capital allocations to REITs in 2023, with approximately 42% of institutions planning to make investments in REITs.

  10. ESG continues to grow in importance, with the majority of institutions reporting that ESG policies have an impact on investment decisions. Approximately 58% of institutions have formal policies in place, up from 56% in 2022 and 32% in 2016. Institutions in Europe continue to lead the industry in implementing ESG policies.



Participation Rate

US$10.2 Trillion
Total Assets

US$1.1 Trillion
Real Estate Assets

Institutions with AUM
in excess of US$50bn

If you are interested in receiving previous copies of the Real Estate Allocation’s Monitor, please email

2022 Allocations Monitor thumb.jpg
2021 Allocations Monitor thumb.jpg
2020 Institutional Real Estate Allocations Monitor
2019 Institutional Real Estate Allocations Monitor
2018 Institutional Real Estate Allocations Monitor
2017 Institutional Real Estate Allocations Monitor
2016 Institutional Real Estate Allocations Monitor
2015 Institutional Real Estate Allocations Monitor
2014 Institutional Real Estate Allocations Monitor
2013 Institutional Real Estate Allocations Monitor
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