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Hodes Weill: Institutions Lower CRE Target Allocations in First Annual Decline
Institutional target allocations to real estate have declined, dropping 10 basis points to 10.7% in 2025, according to the 13th annual Institutional Real Estate Allocations Monitor, published by Hodes Weill & Associates and Cornell University’s Baker Program in Real Estate. This marks the first annual decline since the survey’s inception in 2013. However, institutions expect to increase target allocations by 10 bps in 2026.
The decline in target allocations follows a three-year plateau at 10.8% and ends a nearly decade-long growth trend that saw target allocations increase more than 20% between 2013 and 2022. The reduction in target allocations is the result of market uncertainty combined with competition from other asset allocations.
Douglas Weill, managing partner at Hodes Weill, said, “While we’re seeing the first decline in target allocations since our survey began, this is consistent with the expected tactical pause we reported last year rather than a strategic shift away from real estate. Importantly, institutions remain meaningfully underallocated to the asset class.”
Pictured: Hodes Weill headquarters in Midtown Manhattan.
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