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PRIVATE EQUITY REAL ESTATE
MEASURING PROPERTY RISK IN A SECURITIES MARKET FRAMEWORK

The Private Equity Real Estate Model is designed to eliminate the appraisal bias associated with traditional industry benchmarks and appraisal-based valuation methodologies. Combining property-specific and property market data, the model not only produces risk estimates for real estate using methods that are consistent with those used for traded securities, but also traces and quantifies the sources of risk at both the property and portfolio levels. Because the model is linked to Northfield’s Everything Everywhere Model and Open Optimizer, risk metrics and portfolio construction tools normally associated with stocks and bonds are now available to global property owners.