So says the National Property Index of the National Council of Real Estate Investment Fiduciaries (Index) which produced stellar returns during the 4th quarter 2010 as well as on a trailing 12-month (January 1 – December 31, 2010) basis. The Index, which is comprised of 6,175 properties valued at $247.1 billion, charts the performance (income, appreciation, and total return) of properties owned by institutional investors and functions as a benchmark by which many institutions rate the performance of both their real estate investments and real estate investment managers.
The first chart which follows details the performance of the Index as an entirety for the 3rd and 4th quarters 2010 as well as on a trailing 12-month basis. The second chart tracks performance for the same periods by property type; the third chart tracks performance by region.
Key take-a-way : after seven consecutive quarters (ending December 31, 2008 through June 30, 2010) of negative returns, the Index turned positive, signaling improving economic performance (and value) of commercial real estate. While we are not out of the woods by any measure, there appears to be daylight ahead.
Total Index | 4th Quarter 2010 Returns | 3rd Quarter 2010 Returns | Trailing 12-Months Returns |
Total | 4.62% | 3.86% | 13.1% |
Income | 1.60% | 1.63% | 6.8% |
Appreciation | 3.02% | 2.23% | 6.1% |
Property Type Sub-Indexes |
| 4th Quarter 2010 Returns (%) | 3rd Quarter 2010 Returns (%) | Trailing 12-Months Returns (%) |
Multifamily | Total | 6.29 | 6.04 | 18.2 |
| Income | 1.42 | 1.44 | 5.9 |
| Appreciation | 4.86 | 4.61 | 11.8 |
Hospitality | Total | 3.35 | 3.09 | 9.0 |
| Income | 1.86 | 1.53 | 6.6 |
| Appreciation | 1.48 | 1.56 | 2.2 |
Industrial | Total | 3.42 | 2.80 | 9.4 |
| Income | 1.69 | 1.79 | 7.3 |
| Appreciation | 1.74 | 1.01 | 2.0 |
Office | Total | 3.93 | 3.12 | 11.7 |
| Income | 1.58 | 1.65 | 6.9 |
| Appreciation | 2.35 | 1.47 | 4.6 |
Retail | Total | 4.77 | 3.39 | 12.6 |
| Income | 1.73 | 1.71 | 7.1 |
| Appreciation | 3.04 | 1.68 | 5.3 |
Regional Sub-Indexes |
| 4th Quarter 2010 Returns (%) | 3rd Quarter 2010 Returns (%) | Trailing 12-Months Returns (%) |
East | Total | 5.30 | 4.17 | 15.1 |
| Income | 1.60 | 1.60 | 6.6 |
| Appreciation | 3.70 | 2.57 | 8.1 |
Midwest | Total | 3.56 | 3.50 | 9.7 |
| Income | 1.63 | 1.71 | 6.9 |
| Appreciation | 1.93 | 1.80 | 2.7 |
South | Total | 4.42 | 3.59 | 12.1 |
| Income | 1.62 | 1.67 | 6.9 |
| Appreciation | 2.80 | 1.93 | 4.9 |
West | Total | 4.42 | 3.84 | 12.9 |
| Income | 1.57 | 1.62 | 6.7 |
| Appreciation | 2.85 | 2.22 | 5.9 |
