NEW YORK CITY—A low interest rate environmentis a decided plus for commercial real estate when it comes toinstitutional investors' allocation decisions. Nearly half, or 47%,of 201 executives surveyed by BlackRock said thatlow interest rates influence their investments in real assets,including real estate, infrastructure and commodities. However, aneven higher percentage—63%—rank “increasing returns” among thethree most important factors in their decisions.

The survey was conducted by the Economist Intelligence Unit inSeptember on a commission from BlackRock. It found that 46% ofrespondents had increased allocations to real estate,infrastructure, commodities, timber and farmland in the past threeyears, while 60% said they expect to do so over the next 18months.

Of the three basic asset classes that comprise real assets, realestate is far and away the biggest draw for institutions, judgingfrom the BlackRock survey. Ninety-six percent of respondents haveinvested in real estate, with 59% taking a conservative approachvia core equity. That being the case, the potential of higherreturns has led 47% of investors to increase their allocations tovalue-added equity and 34% to opportunistic equity strategies.