DCREC co-Presidents David Skinner of Prudential Real Estate Investors and Laurie Tillinghast of UBS Global Real Estate-U.S. say that as defined benefits plans gave way to 401(k)s and other DC plans, investors and plan sponsors have not fully grasped the role commercial real estate can play as part of a balanced retirement savings account.
“There is not clear definition of alternatives. [Real estate investment trusts] are alternative investments by some; others would define it as a core asset class,” said Skinner.
“If you ask a room full of 15 plan sponsors what ‘alternatives’ mean, you’d probably get 15 different answers. The industry hasn’t done a great job coming up with a standard definition,” one consultant surveyed by the council said.
Respondents included plan sponsors, real estate and DC plan consultants and money managers representing $14 trillion in total assets under management and advisement.
The DCREC was founded in 2013 by a coalition of global institutional and real estate asset managers to help educate plan sponsors and consultants about how investment in commercial real estate can improve retirement security for DC plans and their participants.