U.S. Property Values Up Nearly 6 Percent in March

Property values nationwide increased about 5.6 percent in March as measured by the FTSE NAREIT PureProperty Index Series.

Brad Case, NAREIT’s senior vice president for research and industry information, noted that March saw rebounds in property values and the total returns that REITs receive from ownership of their properties.

“That’s very relevant to many investors, especially institutional investors,” Case said. He explained that investors who own both properties and shares in REITs want to understand whether performance at the property level is stronger in the REIT-owned properties or in the properties owned outside of REITs.

Turning to the first quarter, the PureProperty Index Series showed that property values rose 3.3 percent nationwide. Case pointed out that the PureProperty Index and other measures of property value differ in that it provides an up-to-date assessment of the market. Whereas the PureProperty Index is now demonstrating a recovery in the REIT market, “other measures from the private part of the real estate market are now just going into their decline,” Case said.

Meanwhile, the PureProperty Index also showed a 5.9 percent gain in property values in the East and the West during March, Case noted.

Looking at the first quarter, the South was the strongest performer among the regions, Case observed, with prices up more than 6 percent. It was about half that amount in each of the other three regions of the country, Case said. The PureProperty Index also showed that apartment properties performed better in the East during March, while office properties did better in the South.