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Listed Real Estate: A Compelling Complement to Private Real Estate Portfolios

Executive Summary

Over the last several years, sophisticated institutional investors have increasingly begun to recognize the benefits of complementing their private real estate allocations with strategic, long-term allocations to listed real estate. This represents a change in investment strategy for many institutions, including some of the world’s largest sovereign wealth funds and endowments, whose portfolios have historically sought real estate exposure only through the private markets.

We believe that the trend of combining both private and listed real estate exposure is being driven by investor recognition of four primary factors:

  1. Innovation and Growth in Specialty Property Types: over the last decade, the commercial real estate market has evolved to include a variety of innovative, non-traditional property types, many of which have been driven by advances in technology, demographic shifts and societal changes in the way we utilize real estate. These “Specialty” real estate companies tend to operate in sectors where demand outpaces supply and have distinctive demand drivers, generating attractive, higher-growth returns vs. traditional real estate sectors1. The emergence of the Specialty investable universe – which includes property types such as data centers, wireless cell towers, medical office buildings, timber and life science/lab space – has occurred primarily in the publicly-traded real estate market.
  2. Public/Private Arbitrage Opportunities: while all commercial real estate investment returns, whether held in a private or publicly-traded portfolio, are driven by real estate fundamentals and demonstrate a strong correlation to one another over time, differences in how and when real estate is valued in a private vs. public wrapper can create arbitrage opportunities for savvy investors.While publicly-traded real estate is valued daily on the market and thus recognizes changes in fundamentals immediately, private real estate is valued through appraisals on a quarterly basis – at a lag vs. the real-time data incorporated into publicly traded real estate prices.This lag offers investors several advantages when combining public and private real estate in their portfolios, including:
    • Portfolio diversification benefits – driven by the offset timing in how private and listed real estate respond to changes in fundamentals, with private real estate price changes lagging the public market
    • Informational advantages – listed real estate’s ability to reflect new information into pricing on a real-time basis can help offer private investors directional guidance on the potential investment opportunities and the possible trajectory of private real estate returns
    • Pricing dislocation opportunities – given its equity wrapper, listed real estate prices may at times react negatively to exogenous, non-fundamental market conditions, creating transitory periods where real estate securities may trade at discounts to their net asset values. During these periods, REITs can be the target of M&A, which may create compelling investment returns for shareholders of these real estate companies.
  3. Attractive Investment Characteristics: as an asset class, listed real estate exhibits a number of attractive investment characteristics that have become increasingly recognized and favored by investors in recent years, including:
    • Daily liquidity, allowing for adjustments to portfolio exposure with greater speed and efficiency
    • Diverse property exposure across geographies and sectors, holding thousands of assets in aggregate
    • High income, as REITs are required to pay out a large percentage of their free cash flows to investors
    • Superior management teams with strong corporate governance infrastructure
    • Strong balance sheets with access to capital in all four quadrants (debt and equity, both public and private), maximizing financial flexibility with low cost of capital
    • Transparency, driven by regulatory disclosures and “Street” oversight
  4. Strong Alignment of Interests Drives Shareholder Value: insider ownership of publicly traded real estate companies is very high, with executive teams typically owning significant company equity, thus aligning management interests with those of shareholders by ensuring they have significant “skin in the game”. By structuring ownership in the company as a substantial component of executive compensation, listed real estate companies incentivize management teams to boost stock prices and grow dividends for investors.

1 Source: FactSet. Represents the period since December 31, 2015 through December 31, 2022, during which time the Specialty sector of the FTSE EPRA Nareit Developed Index generated a cumulative total return of 53.2% vs. the non-Specialty (or, “Core”) property sectors of the index, which generated a return of 10.4%.

JARIX Offers Private Real Estate Investors a Complementary Approach Real Estate Investing

Easterly’s investment approach is particularly well suited to those investors whose existing portfolios are biased towards private real estate exposure.

While there has been some recent growth in the availability of Specialty investment opportunities in the private real estate arena, the majority of the Specialty investable universe exists in the listed market, putting private-only real estate investors at a disadvantage in accessing this diverse, quickly evolving opportunity set of high growth property types.

We believe that private real estate investors have the ability to diversify their real estate exposures and potentially enhance their portfolio returns through an investment in the Easterly Global Real Estate Fund (“JARIX”), whose investment strategy has been engineered since its 2009 inception to provide investors with significant Specialty sector exposure through our concentrated, “best ideas” investment approach.

By complementing a predominantly traditional, private real estate portfolio with JARIX’s significant overweight to the Specialty sector, we offer investors the opportunity to complement their real estate allocations and gain access to some of the most compelling real estate investment opportunities available, driven by strong secular trends, including the digitalization of commerce, the increasing need for data storage and transmission, and shifts in global demographics. 

The Fund is well positioned to deliver investors with superior exposure to these alternative property types. While many real estate fund managers began investing in these companies amidst the Covid-19 pandemic in 2020, JARIX has long established itself as an industry leader in the Specialty sector, with its pioneering investments in these property types over the last decade. 

The deep domain expertise of the Portfolio Managers in Specialty sector real estate investments is evidenced by attribution analysis of the fund’s track record – since JARIX’s inception in 2009, we have generated 1,256 basis points in gross excess returns for our investors through stock selection in the Specialty sector (as of December 31, 2021)2. Our ability to deliver significant alpha through Specialty exposure is aided by our nimble size – with nearly $1 billion in fund assets under management, JARIX is of sufficient size to benefit from the same economies of scale as our larger competitors, but not so large that we must own companies solely because they are significant constituents of the benchmark. 

Finally, we believe that the best evidence of the effectiveness of our “Completion”-oriented investment approach is the results it produces for investors. JARIX continues to generate strong outperformance vs. both the benchmark and its peer group. 

2 Source: FactSet. For the period since November 2, 2009 through December 31, 2022. Represents gross excess returns vs. the FTSE EPRA Nareit Developed Index. Unlike other property sectors, the Specialty sector is comprised of a disparate group of property types with differentiated investment characteristics. Therefore, we evaluate the performance attribution generated by the Specialty sector on a total basis only, categorizing all excess returns as stock selection.


12/31/2022QTD1 YEAR3 YEAR5 YEAR10 YEARSince Inception
I Shares7.08%-24.18%-2.14%2.48%5.19%6.25%
Morningstar Global Real Estate Category7.38%-25.52%-4.85%-0.21%2.68%3.45%
FTSE EPRA Nareit Developed Index7.11%-24.41%-4.06%0.69%3.90%4.59%

Past performance does not guarantee future results and current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment will fluctuate, so that shares when redeemed may be worth more or less than their original cost. Investors cannot invest directly into an index. For performance information current to the most recent month-end, please call 888-814-8180. 

SOURCE: Morningstar Direct. Performance data quoted above is historical. 

The Fund’s management has contractually waived a portion of its management fees until March 19, 2023 for I, A, C and R6 Shares. The performance shown reflects the waivers without which the performance would have been lower. Total annual operating expenses before the expense reduction/reimbursement are 1.26%, 1.51%, 2.26% and 1.26% respectively; total annual operating expenses after the expense reduction/reimbursement are 1.04%, 1.51%, 2.26% and 0.94% respectively. 5.75% is the maximum sales charge on purchases of A Shares. 

The Fund’s investment adviser has contractually agreed to reduce and/or absorb expenses until at least March 19, 2023 for I, A, C and R6 Shares, to ensure that net annual operating expenses of the fund will not exceed 1.04%, 1.69%, 2.37% and 0.94%, respectively, subject to possible recoupment from the Fund in future years. 

Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund. This and other information is contained in the Fund’s prospectus, which can be obtained by calling 888-814-8180 and should be read carefully before investing. Additional Fund literature may be obtained by visiting 


FTSE EPRA Nareit Developed Real Estate Index: Is comprised of publicly-traded REIT securities in developed countries worldwide which have met certain financial criteria for inclusion in the Index. Each company must derive the bulk of its earnings through the ownership, management or development of income-producing commercial real estate. You cannot invest directly in an index.

Important Fund Risks

Past performance is not a guarantee nor a reliable indicator of future results. As with any investment, there are risks. There is no assurance that any portfolio will achieve its investment objective. Mutual funds involve risk, including possible loss of principal. The Easterly Funds are distributed by Ultimus Fund Distributors, LLC. Easterly Funds, LLC and Ranger Global Real Estate Advisors, LLC are not affiliated with Ultimus Fund Distributors, LLC, member FINRA/SIPC. Certain associates of Easterly Funds, LLC are securities registered with FDX Capital LLC, member FINRA/SIPC. 

There is no assurance that the portfolio will achieve its investment objective. The Fund is subject to stock market risk, which is the risk that stock prices overall will decline over short or long periods, adversely affecting the value of an investment. Risks of one’s ownership are similar to those associated with direct ownership of real estate, such as changes in real estate values, interest rates, cash flow of underlying real estate assets, supply and demand and the creditworthiness of the issuer. International investing poses special risks, including currency fluctuations and economic and political risks not found in investments that are solely domestic. Incorporating alternative investments into a portfolio presents the opportunity for significant losses including in some cases, losses which exceed the principal amount invested. Also, some alternative investments have experienced periods of extreme volatility and in general, are not suitable for all investors. Asset allocation and diversification strategies do not ensure profit or protect against loss in declining markets. 

Easterly Funds, LLC serves as the Advisor to the Easterly Funds family of mutual funds and related portfolios. Their form ADV can be found at Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see prospectus, or if available, a summary prospectus containing this and other important information. Read it carefully before you invest or send money. Mutual Funds are distributed by Ultimus Fund Distributors, LLC. Member FINRA/SIPC. 

As with any investment, there are multiple risks associated with REITs. Risks include declines from deteriorating economic conditions, changes in the value of the underlying property and defaults by borrowers, to name a few. Please see the prospectus for a full disclosure of all risks and fees. 


16360395-UFD 02/01/2023

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