NCREIF Property Index Released

Down but Not Out – Returns Down for Quarter but Prices Still Increased

CHICAGO, IL, January 25, 2019 – The National Council of Real Estate Investment Fiduciaries (NCREIF) has released fourth quarter 2018 results for the NCREIF Property Index (NPI). The NPI reflects investment performance for 7,883 commercial properties, totaling $612 billion of market value. The returns are detailed in the attached Snapshot Report.

The total return was 1.37% in the fourth quarter, down from 1.67% last quarter.  This is an unleveraged return for what is primarily “core” real estate held by institutional investors throughout the US.

The average quarterly return over the past five years was 2.28% or 9.85% annualized.  Although the current quarter’s return of 1.37% or 5.61% annualized is down from the torrid pace during the previous 5 years, the capital return was still slightly positive at 0.26%.

NPI Total Returns

The positive capital return indicates that on average, properties in the NPI are still increasing in value after deducting capital expenditures that have been added.

Industrial Once Again Saving the Quarter While Retail Returns Turn Negative

Industrial properties, which are primarily warehouse, continue to be the stellar performer with a return of 3.40% for the quarter which was up from the prior quarter return of 3.36%.  Office followed with a return of 1.65% followed by apartment at 1.35%, hotel at 1.21% and the continuing laggard retail had a negative 0.43% return for the quarter.  This is the first quarter that we have seen a negative return since the fourth quarter of 2009.

NPI Total Returns by Property Type

Return Drivers: Vacancy and Cap Rates at Historic Lows

Occupancy for NCREIF-tracked was at 94.0% which is only down slightly from the occupancy last quarter of 94.17% that was the highest since the 4th quarter of 2000.  Cap rates edged up very slightly to 4.81% from 4.79% last quarter despite the rising interest rate environment. 

NOI grew at 1.4% for the quarter after declining by about 0.8% last quarter.    Rent also grew at 1.5% for the quarter which was up from about 0.7% last quarter. 

About the NCREIF Property Index

The NPI consists of 7,883 investment-grade, income-producing properties with a market value of $612 billion. The market value breakdown by property type is about 36% office, 24% apartment, 23% retail, 16% industrial and 1% hotel properties.

The NPI includes property data covering over 100 CBSAs. In addition, within in each property type, data are further stratified by sub-type. These data enhance the ability of institutional investors to evaluate the risk and return of commercial real estate across the United States.


NCREIF will hold a webinar on Thursday, February 7th, at 1:00 pm Central Time to discuss an overview of the NCREIF Property Index (NPI) and the NCREIF Fund Index – Open End Diversified Core Equity (NFI-ODCE), the Farmland and Timberland Indices, as well as a detailed discussion of the results and interesting data from the NCREIF Property Value Trends report. The conference call is being webcast live and can be accessed here.  An online replay of the webcast will be available on NCREIF’s website at

The National Council of Real Estate Investment Fiduciaries (NCREIF) is an association of professionals with significant involvement and interest in pension fund real estate investments who come together to address vital industry issues and to promote research on the asset class.

 Press Release

NPI 4Q2018 Snapshot