A multi-year slowdown in private real estate has prompted institutional investors to cut their average target allocation to the asset class for the first time in more than a decade. Is it merely a short-term setback for property fund managers, or a sign of a broader shift within institutional portfolios?

The historic reversal reported by Hodes Weill & Associates this week comes after the capital advisory firm had found a steady increase in average target allocations since 2013, when it began tracking them with an annual survey in partnership with Cornell University’s Baker Program in Real Estate. But those gains plateaued starting in 2022, and this year’s 10-basis-point dip suggests that the market effects of high interest rates, geopolitical concerns and the rise of other attractive alternative asset classes are far from over.

In this episode, PERE senior reporter Harrison Connery joins host Greg Dool to break down this year’s Allocations Monitor survey results, and contextualize the main takeaways. Hodes Weill co-founder Douglas Weill also shares his perspective on the results and what they might mean for private real estate fundraising moving forward.