Nareit analysis of data from Preqin, a financial research firm that tracks investments in alternative assets, indicates that the use of REITs by pension plans has been increasing, particularly among the largest, most sophisticated plans. As of January 2024, more than 1,800 defined benefit (DB) pension plans with more than $10 trillion of combined assets under management (AUM) reported having an allocation to real estate. Of those plans, 733 DB pensions with more than $7 trillion of combined AUM had REIT allocations.

The chart above illustrates the growth of REIT asset-based market share among DB pensions from January 2020 to January 2024. While DB total assets have increased approximately 19% in the last five years, DB pension total assets with REIT exposure have increased by 37%. This has resulted in the asset-weighted share of DB pensions using REITs in their real estate strategy to increase from 60% in January 2020 to 69% in January 2024. The share of DB pensions by count using REITs in their real estate strategy in January 2024 has been relatively flat, increasing from 39% to 41% over the same time period.