Real estate is one of the earliest forms of traditional alternative investments and therefore plays a very important role in institutional and individual investor’s portfolios. There are a few different types of real estate equity investing methods: direct real estate investment, real estate investment trusts and commingled real estate funds. This thesis will compare public and private real estate equities and evaluate whether it is possible for pubic and private real estates to substitute for one another. In the short-term horizon, public real estate acts more like small cap stocks, while for the long-term horizon, public real estate returns are comparable to those of moderately leveraged private real estates. A mixed-asset portfolio that includes both public and private real estates can enhance risk-adjusted returns compared to portfolios without allocation of real estate assets.