time writes its output to stderr, so you need to pipe stderr instead of stdout. But it’s also important to remember that time is part of the syntax of bash, and it times an entire pipeline. Consequently, you need to wrap the pipeline in braces, or run it in a subshell:
$ { time ls -l >/dev/null; } 2>&1 | grep real
real 0m0.005s
With Bash v4.0 (probably universal on Linux distributions but still not standard on Mac OS X), you can use |& to pipe both stdout and stderr:
{ time ls -l >/dev/null; } |& grep real
Alternatively, you can use the time utility, which allows control of the output format. On my system, that utility is found in /usr/bin/time:
/usr/bin/time -f%e ls -l >/dev/null
man time for more details on the time utility.