This chapter defines real estate as an investment in physical buildings and land, in both combined, or in financial products backed by physical buildings and land, such as mortgage-backed securities (MBS). Therefore, the mental image of real estate is generally a building, home, or farm that is a physical structure residing on land. In fact, real estate is the second largest asset class in the United States. The value of real estate can be modelled using Portfolio Theory, which addresses repositioning given that a single-tenanted building provides no diversification of industry and risk while a multi-tenanted building provides diversification, provided the tenant's industries are not highly correlated. Yield is a valuation method used for Western finance that is Europe, North and South America. It is the solved discount rate for the series of cash flows when setting the Net Present Value (NPV) equal to zero, in other words, the Internal Rate of Return (IRR).