Real asset investing has undergone a profound transformation over millennia, expanding from direct ownership of land and buildings to a vast ecosystem of digitized, fractional interests in global infrastructure and resources. This journey reflects broader technological advances, economic shifts and the growing demand for diversified, income-generating investments.

Historical Foundations of Bricks Investing

The origins of real estate as a store of value trace back to ancient Mesopotamian property transactions. Around 3000 BCE, Sumerians recorded land sales on clay tablets, and by 1750 BCE the Code of Hammurabi included sophisticated rules on boundaries, tenant obligations and construction standards.

For centuries, ownership of commercial real estate was the domain of powerful institutions—royal treasuries, banks and insurers—due to high capital requirements and low liquidity. Today, institutions still dominate, owning an estimated $10.2 trillion in commercial real estate globally, according to LaSalle Investment Management.

Modern financing innovations reshaped household access. Prior to the 1920s buyers often faced 50% down payments and short-term loans. The Federal Housing Administration (1934) introduced federally insured mortgages with low down payments and 30-year amortizing loans, while the GI Bill after World War II further spurred suburban expansion and broadened homeownership across America.

Democratization of Real Estate: REITs and Securitization

In 1960, the U.S. Congress created Real Estate Investment Trusts (REITs) to open commercial real estate to small investors. By requiring distribution of taxable income as dividends and granting special tax treatment, REITs leveled the playing field for individual investors.

Over the late 20th century, REITs gained market share rapidly. Publicly traded vehicles provided daily liquidity, while non-traded REITs and emerging daily NAV structures offered alternatives with varied liquidity and transparency.

• Publicly traded REITs: Exchange-listed, daily trading.
• Non-traded REITs: Limited redemptions, SEC-registered.
• Mortgage-backed securities: Transforming debt into tradable assets.

The growth of mortgage-backed securities (MBS) and commercial MBS (CMBS) in the 1980s and 1990s democratized real estate debt. Home MBS saw explosive growth, while CMBS issuance surged, providing institutional and retail investors with broader access to property financing and risk transfer.

From Real Estate to Real Assets

As markets matured, the definition of tangible investments expanded beyond bricks to encompass a wider array of real assets. These include:

• Real estate: direct holdings, REITs, specialized property sectors.
• Infrastructure: transport networks, utilities, energy and telecom.
• Natural resources: timberland, farmland, energy fields and minerals.
• Commodities: accessed via futures or linked securities.

According to Russell Investments, listed real assets offer a blend of growth and income with differentiated correlations to stocks and bonds. Many have built-in inflation linkages, such as rent escalators or regulated tariff adjustments.

Institutional investors have increasingly recognized this broader framework. U.S. endowments traditionally combined real estate with natural resources and TIPS, while Canadian and Australian funds favored heavier infrastructure allocations. Over time, allocations shifted from simply adding real assets to 60/40 portfolios toward diversification within real assets, blending property, infrastructure, timberland and commodities for optimal risk-adjusted returns.

Performance and Portfolio Role

Real assets play a defensive, low-beta role in diversified portfolios. Their cash flows—rents, tolls, fees—often exhibit resilience in volatile markets and can adjust with inflation. Infrastructure assets, for instance, may include contractual escalators or regulatory provisions that pass costs to end users.

Key performance characteristics can be summarized:

This diversity of cash flow drivers and inflation sensitivity underpins the appeal of real assets. Periods of rising prices often see enhanced returns from commodity-linked holdings, while rate environments affect leverage costs across sectors differently.

Looking Ahead: Bits and Beyond

Today, the frontier of real asset investing lies in digitization and fractional ownership. Blockchain and tokenization platforms enable investors to purchase fractional stakes in global properties or infrastructure projects with minimal minimums. Data-driven analytics power smarter asset selection, monitoring and risk management.

Practical steps for investors seeking exposure to this evolving landscape include:

• Evaluating platforms that offer regulated tokenized offerings.
• Conducting rigorous due diligence on asset quality and governance.
• Partnering with advisors versed in digital infrastructure and security.

The journey from bricks to bits reflects human ingenuity and the relentless pursuit of better access, liquidity and diversification. As you explore this dynamic space, remember that the principles of careful research, risk management and alignment with long-term goals remain constant.

Whether you’re drawn by stable income streams from classic real estate or the cutting-edge promise of digital infrastructure, real assets offer a pathway to build, preserve and transfer wealth across generations. Embrace innovation responsibly, and you’ll find your portfolio both resilient and ready for the future.