Notwithstanding the diversification benefits of real estate, how does the fact that real estate is not on the Security Market Line (Real Estate is below the SML) affect a portfolio?

1. Does it make a portfolio riskier, less riskier, or is there no impact? Explain.
2. Should a well-diversified portfolio contain more or less real estate or does it have no impact on the amount of real estate in a well-diversified portfolio? Explain.
3. Does it affect the amount and quality of management of the real estate in the portfolio? Explain.