Risk Reduction Possibilities From Diversification Of Real Estate Portfolios

Abstract

Using a macro data base not previously examined, this paper investigates the benefits of diversification in real estate portfolios.  Results support the findings of Burns and Epley (1982) and Miles and McCue (1984) that large reduction in risk can be achieved by intra regional diversification.  But contrary to some previous work, substantial benefits from interregional diversification are also indicated.