Real estate as an investment option in DC plans

A new group is trying to promote the use of commercial real estate as an investment option for employer-sponsored retirement plans.

A coalition of 10 global institutional real estate asset managers have formed the New York-based Defined Contribution Real Estate Council to serve as a resource for investors and plan sponsors who may be considering alternative investment options, such as real estate, through their existing portfolios.

As traditional pension plans, or defined benefit plans, gave way to 401(k) plans and other similar defined contribution plans, investors and plan sponsors have failed to fully grasp the role commercial real estate can play as part of a balanced, long-term retirement savings portfolio.

The idea for the trade group stemmed from a September 2011 conference led by Ben Adams, Founding Partner of Ten Capital Management.  The group of global real estate asset managers gathered to discuss ways in which real estate investment could help the more than 85 percent of American workers, without a traditional pension, save enough money for retirement.

“At the end of the day, our goal is to help plan sponsors and their participants achieve better investment outcomes through the use of institutional quality real estate solutions,” said Scott Brooks of Deutsche Asset & Wealth Management and DCREC co-president. "We are forming this council at a time when defined contribution plans are under increasing pressure to deliver improved outcomes for their participants."

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