US-Based Foundations Investing in Private Real Estate - August 2015

by Evan Barker

  • 03 Aug 2015
  • RE

Preqin’s Real Estate Online tracks 500 US-based foundations that are investing in private real estate. As illustrated in the chart below, foundations make up a high number of US-based real estate investors but account for only a small proportion of the total capital allocated to the asset class; 28% of US-based real estate investors are foundations, however, they represent only 2% of total real estate investment. In comparison, just seven sovereign wealth funds collectively represent the same proportion of capital allocated to real estate as foundations.

Foundations’ relatively small real estate allocation reflects the investor type’s typically small assets under management (AUM); 45% have less than $250mn in AUM, 80% have less than $1bn, with only five percent managing $5bn or more. In terms of their current allocations to the real estate asset class, the majority (64%) of foundations allocate less than 5%  of their total assets to real estate, 28% allocate between 5% and 9.9%, and 8% allocate more than 10% of their AUM to the asset class.

The five US states that account for the most foundations are California (68), New York (60), Illinois (26), Massachusetts (24) and Pennsylvania (21). These five states together make up 40% of all US-based foundations that invest in real estate.

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