Commercial Real Estate Returns for the Past 10 Years

The National Council of Real Estate Investment Fiduciaries (NCREIF) is a non-profit  trade association for pension funds and other tax-exempt investors in real estate created to aggregate and report accurate, unbiased real estate return data. 

One of the many data series they provide is the NCREIF Property Returns Index reporting quarterly performance in both property value and operating income for  more than 6,800 commercial properties having a combined value in excess of $283 billion.  A description of the index and the quarterly can be found here.  This series is perhaps the best proxy for U.S. commercial real estate performance.

In the past 10 years, average annual return of the index was 7.73 percent, with a combined 13.56 percent total return (property value change and operating income) in 2011.  While some of the properties are leveraged using debt, the index is calculated as if all properties were unlevered. 

Commercial real estate was one of the top investment performers in 2011.  In the past decade, the total return was more than 117 percent—a more than doubling of the original investment. 

 

Click here for a look at all of the NCREIF data series (including timberland).

Ted

Comments

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    This is incredibly useful indeed. I’m astonished this information isn’t more generally available, but many thanks for your attention to it! This is probably the most comprehensive source I have found thus far, and it really is quite helpful. Cheers

  6. Mark

    I had not really considered commercial real estate as an Investment until I read this post, I wonder how it compares with precious metals in the longterm like gold

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