NFI-ODCE posts a 3.93% return for the quarter, the highest since 4.62% in the 2nd quarter of 2011
CHICAGO, IL, July 30, 2021 – The National Council of Real Estate Investment Fiduciaries (NCREIF) released second quarter 2021 results for the NCREIF Fund Index – Open‐end Diversified Core Equity (NFI-ODCE). The NFI-ODCE consists of 27 funds totaling $280.3 billion of gross real estate assets and $233.5 billion of net real estate assets.
NFI-ODCE total return gross of fees for the second quarter 2021 was 3.93%, up from 2.11% in the previous quarter, and from -1.56% a year ago in second quarter 2020. The income return was 0.99%, up slightly from 0.98% in the previous quarter, and from 0.91% in second quarter 2020. The appreciation return was 2.94% for the quarter, above the previous quarter’s 1.12%, and up significantly from 2020 second quarter’s -2.46%.
Quarterly NFI-ODCE Gross Return Trends
For the one-year ended June 30, 2021, the NFI-ODCE total return gross of fees was 8.02%, up from 2.32% for the one-year ended March 31, 2021, and well above the three-year annualized return of 5.52%. The one-year total return ended June 30, 2021 was comprised of 3.89% income and a 4.01% appreciation return.
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 is above the 21.8% average since 2000, registering 22.6% as of current quarter-end, down slightly from 23.1% in the previous quarter.
NFI-ODCE Leverage Trends (% of total assets)
Quarterly NFI-ODCE investor net cash flows were negative $1.3 billion, compared to last quarter’s negative $2.1 billion, and second quarter 2020’s negative $799.7 million. For the one-year ended June 30, 2021, contributions were $13.6 billion, and distributions and redemptions were $18.7 billion, resulting in an annual investor net cash flow of negative $5.1 billion.
NFI-ODCE Investor Cash Flow Trends (4Q Rolling Total, Billions)
Additional details from the NFI-ODCE release are in the attached Snapshot Report.