NEW YORK CITY-As part of a series of reports anticipated to be available three times a year, Deutsche Bank Group’s RREEF Real Estate has released “Direct Real Estate: Institutional Grade Investing for Individuals’ Portfolios.” The report looks at how individual investors can reap the benefits associated with direct investment in commercial real estate, an area typically the dominion of larger institutional investors.

According to the report, since the end of the tech bubble, portfolios of institutional investors have outperformed conventional portfolios made up of publicly traded equities. In fact, between 1990 and 2010, real estate came out on top of equities over half of the time, logging an average income yield of 7.5%.

Scott Brooks, head of Americas retail client relations and business development at RREEF Real Estate, says that much of this is due to the diversification that access to direct real estate allows. He says that fund managers are onto this, though, and have devised a structure that allows individuals to access the area.

“A number of providers in the space—particularly large institutional real estate managers—have begun to create these hybrid type products, which involve a combination of direct commercial real estate investment with real estate securities—REITs that are publicly traded,” he says.

The new hybrid construct consists of two thirds allocated to private real estate, through institutional funds, and one third allocated to shares of REITs. Brooks says that while “public real estate securities have been available in the broad retail and/or defined contribution market now for a number of years,” direct real estate’s availability elsewhere has shifted.

“It’s the introduction of direct real estate into the broader retail market, and specifically the defined contribution market, where outside of a couple of exceptions it’s been virtually unavailable,” he says. “That’s been primarily a function of lack of liquidity, lack of daily pricing, which have been to some degree surmounted more recently with some of these product innovations.”

The fact that the real estate is accessed through institutional type funds, Brooks says, is not really the point. “That’s really a packaging item,” he says. “And the package allows that access to the underlying direct commercial real estate.”

NAREIT data backs up RREEF’s assertions—and shows that the hybrid model not only beats publicly traded equities, but direct real estate investment alone. However like any investment there are risks, though Brooks says what is well known: that diversification is key.

“I’m not sure if I would define it as more or less risk,” he says. “But one of the prominent tenants of diversification is spreading across multiple asset classes and I think it’s key to distinguish within that premise that low correlation assets provide that diversification.”