Rosemary Pugh, marketing manager with Green Street Advisors, joined REIT.com for a video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Based in Newport Beach, Calif., Green Street Advisors has been in business more than 25 years providing research and advice to investors on REIT stocks and real estate companies.
Pugh discussed the Green Street Advisors Commercial Property Price Index (GSA CPPI) and how it’s calculated.
”Green Street’s index is one of the most timely. It’s calculated based on the private market values of the real estate owned by the REITs that we cover,” she said. “So, it encompasses about $400 billion worth of property.”
Pugh added that Green Street has approximately 30 analysts that research the different sectors to do a deep market by market, property by property analysis. She said that information is then gathered on a monthly basis and published on the company’s CPPI within four business days. It can be found posted on the firm’s website (www.greenstreetadvisors.com).
Pugh also gave an overview of property valuations.
“At this point our CPPI is saying that real estate prices have pretty much recovered back to the prior peak from mid-2007,” she said.
As 2013 approaches, Pugh said the CPPI’s forecast for the next six months currently shows a continued upward trend in real estate prices. That trend is based on the fact that current real estate returns are based in the 6 percent range, while returns on corporate bonds are in the 4 percent range.
“That spread is wider than it’s historically been, so real estate looks really attractive,” she said.