Real estate investors have long been aware of the “four main food groups” of institutional real estate: the apartment, industrial, office and retail sectors. While that once defined the bulk of the commercial real estate inventory, that view of the investable marketplace has become outdated. Real estate uses change as demand ebbs and flows for various sub-sectors as we have seen recently in the decline of office and retail uses, but emergence of cell towers, life science buildings, data centers, and self-storage facilities.
In fact, evidence of the growth of specialty sectors can easily be seen in the public REIT space where traditionally “alternative” sectors now comprise 60% of market capitalization.