The rapid climb in commercial real estate values has been great for investments. But, ironically, because of the denominator effect, it may have been too good for some institutional investors. And that's bad because these big players might pull back continued new investment due to the denominator effect. At least, that's the suggested result of a recent study from HodesWeill & Associates and Cornell University's Baker Program in Real Estate. 

The annual Institutional Real Estate Allocations Monitor survey took place between May and October 2022. The study was of 173 global institutional investors, including pension plans, insurance companies, sovereign wealth funds, endowments, and foundations with a combined $11 trillion total assets.

The investors had seen their CRE portfolio allocations increase from 10.7% in 2021 to 10.8% this year. Except, the addition wasn't a planned boost, but rather CRE's outperformance compared to other investment classes like equities and fixed income, which had a bad year.