The COVID-19 pandemic upended what had been a healthy real estate market entering 2020. Global real estate securities, as measured by the FTSE EPRA NAREIT Developed Index, are down 21.3% for the year through June 30—trailing global equities—though it’s up from its March 23 low (Display). Investors remain cautious after seeing the severe impact to the lodging and retail sectors. But there’s much more to real estate and overlooking the full picture could mean missing out on the true potential.

Global real estate seems as attractive as it’s been since the Great Recession of 2009 and is considerably cheaper than the wider global equity market. Historically, real estate’s forward price-to-funds-from-operations ratio has averaged about 1.15 times stocks’ forward price-to-earnings ratio. Today, it’s well below that level. And the yield advantage compared to 10-year government bond yields is considerably elevated (Displays).