Cornell University’s Baker Program in Real Estate and Hodes Weill & Associates are pleased to present the findings of the eighth annual Institutional Real Estate Allocations Monitor (the “2020 Allocations Monitor”). The 2020 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 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 2020 Allocations Monitor includes research collected on a blind basis from 212 institutional investors in 29 countries. The 2020 participants hold total assets under management (“AUM”) exceeding US$12.6 trillion and have portfolio investments in real estate totaling approximately US$1.3 trillion. Our survey consisted of 26 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.

We would like to highlight that the results from the 2020 Allocations Monitor were conducted amidst the on-going COVID-19 global pandemic. While the survey is typically a review of the prior calendar year, given the survey dates (June 2020 to October 2020), investors’ responses may have been influenced by the ongoing impact of COVID-19. In early 2020, we were coming off a period of moderating returns and slowing allocations perhaps due to the perceived lateness of the cycle. Anecdotally, this appears to be changing with an increased interest in allocating to opportunistic and distressed strategies, and the expectation of attractive buying opportunities over the coming years. The timing of this survey is important given this dichotomy, and we felt it was worth mentioning at the outset, so that results of the survey can be reviewed within that context.

Media Coverage

  1. Target allocations to real estate continue to rise globally, although the pace of year-over-year growth has moderated. Average target allocations increased to 10.6% in 2020, up 10 bps from 2019, and up 170 bps since we began the Allocations Monitor survey in 2013.  For the second straight year, there is continued moderation of rate increase as compared to the historical range of 20 bps to 40 bps between 2013 and 2018.

  2. Real estate continues to generate favorable investment returns, relative to expectations. Real estate continues to perform well in institutional portfolios, generating an average investment return of 8.5% in 2019 versus  a return target of 8.3%. However, institutions remain cautious about potential returns in 2020, due to COVID-19 and its impact on demand for, and pricing of, real estate. 

  3. Investor sentiment has increased for the third straight year, reaching a 7-year high. Between 2019 and 2020, our “Conviction Index”, which measures institutions’ view of real estate as an investment opportunity from a risk-return standpoint, increased from 5.7 to 5.9.  While the impact of COVID-19 and geopolitical issues on commercial real estate remains a concern, institutions are anticipating that a potential buying opportunity is emerging as distress and dislocation becomes more prevalent.

  4. Cross border capital flows remain resilient despite geopolitical risks; but allocations are shifting towards “home country” investments amidst the global pandemic. While the U.S. remains a preferred destination for international capital flows, institutions’ willingness to allocate to strategies outside of their domestic regions appears to be on the decline. In part, this may be attributed to travel restrictions resulting from the global pandemic, and we are seeing this effect more prevalent on cross border flows to Asia and to a lesser extent, Europe.

  5. Despite market uncertainty, institutions remain committed to the asset class, and expect to be actively allocating to new investments over the next 12 to 24 months. Investors remain under-allocated relative to target allocations, and rising sentiment suggests that investment pacing may increase. Furthermore, the pandemic slowed down many investment plans in 2020 and some investors may be playing “catch-up” in 2021. The expected increase in institutional allocations should continue to support asset pricing, transaction volumes and cost of capital.

  6. Appetite for high-return strategies is growing, with investors focusing on distress. While value add strategies remain the strongest preference for institutions globally, investors are shifting a greater allocation of their portfolios to opportunistic strategies in anticipation of market distress and dislocations. However, we continue to see investors focus on “risk-adjusted returns”, balancing higher returns with strong multiples, at conservative leverage levels as compared to the last cycle.  

  7. ESG continues to be a major focus of investors and is increasingly influencing investment decisions. The importance of ESG in institutional portfolios continues to grow, and investment managers are positioning their organizations and operating practices to accommodate their clients’ objectives.



Participation Rate

US$12.6 Trillion
Total Assets

US$1.3 Trillion
Real Estate Assets

Institutions with AUM
in excess of US$50bn

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

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