Portfolio Construction
Portfolio construction is the strategic process of selecting and weighting properties or funds to achieve target returns while managing risk through diversification and allocation.
| Construction Dimension | Diversification |
| Geographic | Multiple cities, countries, or regions |
| Property type | Office, retail, residential, industrial mix |
| Risk/return | Core, core-plus, value-add, opportunistic blend |
| Tenant industry | Avoid concentration in single sector |
| Lease expiration | Stagger maturities to reduce rollover risk |
| Vintage year (funds) | Smooth J-curve across fund years |
| Sample Portfolio Allocation | Percentage |
| Core stabilized properties | 50% |
| Core-plus | 25% |
| Value-add | 15% |
| Opportunistic/development | 10% |
| Target blended return | 11% to 14% IRR |
| Risk management | Core provides income stability, value-add growth |
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