NFI-ODCE Final Released

Performance of Open-end Diversified Core Equity Funds was up for the fourth quarter of 2019

CHICAGO, IL, January 30, 2020 – The National Council of Real Estate Investment Fiduciaries (NCREIF) released fourth quarter 2019 results for the NCREIF Fund Index – Open‐end Diversified Core Equity (NFI-ODCE). The NFI-ODCE consists of 24 funds, totaling $261.8 billion of gross real estate assets and $221.1 billion of net real estate assets.

NFI-ODCE total return gross of fees for the fourth quarter 2019 was 1.51%, up from 1.31% in the third quarter 2019, and down from 1.76% a year ago in the fourth quarter 2018. The income return for the quarter was 1.04%, down 0.01% from the previous quarter, and well below the ten and twenty-year quarterly averages of 1.22% and 1.44%, respectively. Appreciation increased to 0.47% for the quarter, above the previous quarter’s 0.26%, and down 0.27% from the fourth quarter 2018.

Quarterly NFI-ODCE Gross Return Trends

For the one-year ended December 31, 2019, the NFI-ODCE total return gross of fees was 5.34%, down from 8.35% for the one-year ended December 31, 2018 and well below the annualized since inception return of 8.63%. The annual total return was comprised of 4.18% income and 1.12% appreciation returns.

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 fourth quarter 2019, down slightly from 21.7% in the previous quarter.

NFI-ODCE Leverage Trends (% of total assets)

Quarterly NFI-ODCE investor net cash flows were positive $2.5 million, compared to last quarter’s negative $909.2 million, and fourth quarter 2018’s negative $917.6 billion. For the one-year ended December 31, 2019, contributions were $18.0 billion and distributions/redemptions were $19.9 billion, resulting in an annual investor net cash flow of negative $1.9 billion.

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