NFI-ODCE Final Released

NFI-ODCE’s 2019q2 appreciation return is negative for the first time since 2010q1

CHICAGO, IL, July 30, 2019 – The National Council of Real Estate Investment Fiduciaries (NCREIF) released second quarter 2019 results for the NCREIF Fund Index – Open‐end Diversified Core Equity (NFI-ODCE). The NFI-ODCE consists of 24 funds, totaling $256.1 billion of gross real estate assets and $214.5 billion of net real estate assets.

NFI-ODCE total return gross of fees for the second quarter 2019 was 1.00%, down from 1.42% in the first quarter 2019, and from 2.05% a year ago in the second quarter 2018. The income return for the quarter was 1.01%, down 0.01% from the previous quarter, and well below the ten and twenty-year quarterly averages of 1.25% and 1.47%, respectively. Appreciation decreased to negative 0.01% for the quarter, below the previous quarter’s 0.40%, and down 1.01% from the second quarter 2018. This is the first quarter since 2010q1 that appreciation has been negative.

Quarterly NFI-ODCE Gross Return Trends

For the one-year ended June 30, 2019, the NFI-ODCE total return gross of fees was 6.41%, down significantly from 8.44% for the one-year ended June 30, 2018 and well below the annualized since inception return of 8.67%. The annual total return was comprised of a 4.14% income and 2.19% appreciation.

NFI-ODCE returns measure fund-level performance and therefore can reflect leverage and other investments beyond properties, including cash balances. Leverage is conservative among these funds given their core strategies, ranging from 15%-to-34% over the quarterly series history beginning in 2000. NFI-ODCE leverage remains below the 21.8% average since 2000 and was 21.5% as of the end of second quarter 2019, down slightly from 21.6% in the previous quarter.

NFI-ODCE Leverage Trends (% of total assets)

Quarterly NFI-ODCE investor net cash flows were negative $73.7 million, compared to last quarter’s negative $904.6 million, and second quarter 2018’s positive $721.1 million. For the one-year ended June 30, 2019, contributions were $18.0 billion and distributions/redemptions were $18.8 billion, resulting in an annual investor net cash flow of negative $854.7 million.

NFI-ODCE Investor Cash Flow Trends (4Q Rolling Total, Billions)

Additional details from the NFI-ODCE release are in the attached Snapshot Report.

Press Release