This chapter will focus solely on efficiency as measured by the Coefficient of Variation, or CV and also on achieving an asset allocation, which seeks to exist on the Efficient frontier rather than above it. The chapter explains the basics of pro forma portfolio and Portfolio Theory is to learn and identify the differences between single and multi-asset risk and return. It considers the additional real estate assets that could be analyzed and added to the example portfolio. The chapter highlights minimization of unique risk, and by association, the portfolio risk of the real estate portfolio construction. The primary principle of Modern Portfolio Theory is the optimization of the portfolio. Here optimization refers to obtaining the highest possible return at a precise level of risk, known as the risk-adjusted return. To obtain the optimum allocation, the asset combination must balance the risk and return. This balance is known as the efficiency of the portfolio.