FTSE Group, NAREIT Launch PureProperty Index Series

FTSE Group and NAREIT have launched the FTSE NAREIT PureProperty Index Series, which provides a daily measure of U.S. real estate price and total returns at the level of both property and equity investments.

The index series’ values are based on price appreciation and income distributions generated by portfolios of properties owned by stock exchange-listed U.S. Equity REITs.

Brad Case, NAREIT’s senior vice president for research and industry information, described the new series as “potentially a watershed in institutional investment in real estate.”

The PureProperty Index series includes indices for the apartment, health care, hotel, industrial, office and retail sectors. There are also regional indices for the West, South, East and Midwest, as well as 11 combinations of property types and geographic regions. Case said the various combinations available can give “real insight” into how the real estate market is working nationwide.

“When the market turns in a given segment of the market, you’re going to get information on the same day through the PureProperty Index. Whereas if you look at indexes from the private side of the real estate industry, you are going to wait months to see them,” he said.

Direct real estate investors with large positions in a particular category of the real estate market can use the indices to make investments designed to hedge their exposures and reduce their portfolio’s risk.

NAREIT President and CEO Steven A. Wechsler noted that “by providing daily information on changes in property values, which enables more effective investment and hedging strategies, the FTSE NAREIT PureProperty indices enable real estate investors to seek to reduce their market risk and to increase the returns of their real estate portfolios.”