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Analysts face obstacles when applying financial statistics—often used to describe public equity investments—to private institutional real estate positions. For example, in order to generate the most meaningful interpretations of standard deviation as a proxy for risk, it is prudent to ensure numerous observations. Applying this metric to private real estate data can help investors understand the nature of real estate, separate from the influences of public Real Estate Investment Trust (REIT) structures (i.e., the “price-discovery” method of valuation and the managing entity within the investment).
Source : UBS AG