Real estate is nearing a bottom and eventually could be a better bet for investors than stocks or bonds, Pimco's Bill Gross told CNBC.
Both commercial and residential real estate are reaching a bottoming point and possibly even prepared to turn higher, said Gross, CIO of Pacific Investment Management Co., or PIMCO, the world's largest bond fund.
With stocks likely to return 5 to 6 percent and bonds 3 to 4 percent, he said, investors would be wise to start looking at real estate opportunities.
"Ultimately the riskier assets will be the less the risky assets," he said. "I wouldn't suggest moving into those particular sectors at the moment but ultimately risk and reward go together."
Lower debt and better lending rates will make real estate attractive, he added.
One thing Gross said he won't be buying is Greece debt. The troubled nation has been fairly successful so far in getting investors interested in buying its bonds—albeit it yields of more than 6 percent—but Gross said he doesn't think the country's prospects are favorable.
"They are really in a pickle here, as are other southern European countries—Spain, Portugal, Italy and the like," he said. "This problem is really a longer-term problem, it's not a problem for the next week. I don't see very many buyers in the United States taking the bait at these particular levels."