Contents
         Private vs. Public Real Estate Investing:
            Why Real Estate?
            Types of Real Estate Investments:
              Public – Real Estate Investment Trust
              Private – Commingled Funds/Limited Partnerships/Separate Accounts
              Public or private?
            Private vs. Public Real Estate
            Developing a Real Estate Strategy
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         Why Real Estate?
            Real estate makes up approximately 20% of domestically 
             invested assets
              $5.6 trillion in value (U.S. commercial real estate) as of 9/30/05
              Can be accessed through a range of available investment approaches
            Low correlation to stocks and bonds leads to higher 
             diversification benefits
            Historically proven to be a good hedge against inflation
              Construction costs typically rise in an inflationary environment
              Rental income increases with inflation
            High current income
              A large portion of real estate returns is the stable income component
                                     WURTS & ASSOCIATES
      Source: JP Morgan Asset Management                                           PAGE 3
        Types of Real Estate Investments
        In general, there are two types of real estate markets:
        I.   Public real estate market
                Real Estate Investment Trusts (REITs)
                Real Estate Operating Companies (REOCs)
        II.  Private real estate market
                Direct
                Separate Accounts, Joint Ventures/Partnerships
                Commingled Funds
                Operating Companies
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        Types of Real Estate Investments
          Real estate investment portfolios can be categorized in four 
         
           different styles which varies in leverage usage and return 
           objectives:
               Core   
               Publicly Traded REITs
               Value-Added 
               Opportunistic
            Return                                    Opportunistic – Total Return (20% or higher)
                                              Value Added – Total Return (12% - 16%)
                                    Publicly-Traded REIT – Total Return (9%-11%)
                              Core – Total Return (7% - 9%)
                                                                    Risk
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        Public Real Estate 
        Real Estate Investment Trusts
        Most  common  public  real  estate  investment  vehicle  is  the  Real 
          Estate Investment Trusts (REITs).
        REIT is a special type of company created securities which allow 
          investors to participate in the commercial property markets through 
          readily traded shares of a public company. 
        Simply,  REITs  can  be  viewed  as  shares  of  companies  in  the  real 
          estate business. 
          Advantages
               Greater liquidity – Trade on a major exchange on a daily basis
               Daily pricing – Priced or valuation varies as investor sentiments are tied into REIT 
                prices
               Transparency – Has to be transparent in order to qualify as a REIT
          Drawbacks
               Higher  volatility  –  Due  to  greater  liquidity,  other  factors  besides  underlying 
                fundamentals tend to influence returns
               Higher correlation – Higher correlation to major asset classes than private real estate 
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