REITs: Real Estate With a Return Premium
A NAREIT analysis of the performance of publicly traded equity REITs and private equity core, value-added and opportunistic funds over the last full real estate cycle shows REITs outperformed private equity real estate funds over the entire cycle, as well as over the bull market portion of the cycle when value-added and opportunistic funds’ higher leverage would have been expected to deliver superior returns.
NCREIF-NAREIT Quarterly Executive Summary
Private real estate markets posted a 2.6 percent total return in the third quarter, according to the NCREIF NPI. Public real estate markets eased off after strong gains earlier in the year, with a minus 2.6 percent total return on the FTSE NAREIT All Equity REITs Index. Returns over year-ago remain solid, with the NPI up 11.3 percent and REITs enjoying a 13.2 percent total return. Fundamental forces are aligned for continued improvements as positive economic trends have increased demand for commercial real estate while supply of new properties remains tight.
REITs and Private Equity Real Estate Funds: The Blended Portfolio Advantage
A NAREIT analysis of nearly 22 years of data shows the diversification achieved by blending public REITs with private equity real estate produces superior portfolio returns with lower risk, delivering significantly increased Sharpe ratios (risk adjusted returns).