NFI-ODCE posts a 1.30% return for the quarter lifting the one year to 1.19%
CHICAGO, IL, January 29, 2021 – The National Council of Real Estate Investment Fiduciaries (NCREIF) released fourth quarter 2020 results for the NCREIF Fund Index – Open‐end Diversified Core Equity (NFI-ODCE). The NFI-ODCE, which added a new fund this quarter, consists of 26 funds, totaling $270.9 billion of gross real estate assets and $224.5 billion of net real estate assets.
NFI-ODCE total return gross of fees for the fourth quarter 2020 was 1.30%, up from 0.48% in the previous quarter, and down from 1.51% a year ago in fourth quarter 2019. The income return was 0.92%, down from 0.95% in the previous quarter, and down from 1.04% in fourth quarter 2019. The appreciation return was 0.38% for the quarter, above the previous quarter’s -0.46%, and down from 2019 fourth quarter’s 0.47%.
Quarterly NFI-ODCE Gross Return Trends
For the one-year ended December 31, 2020, the NFI-ODCE total return gross of fees was 1.19%, down from 5.34% for the one-year ended December 31, 2019 and well below the three-year annualized return of 4.92%. The one-year total return ended December 31, 2020 was comprised of 3.85% income and a -2.59% 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 slightly above the 21.8% average since 2000, registering 23.2% as of the end of the quarter, up from 22.7% in the previous quarter.
NFI-ODCE Leverage Trends (% of total assets)
Quarterly NFI-ODCE investor net cash flows were negative $866.7 million, compared to last quarter’s negative $817.3 million, and fourth quarter 2019’s positive $2.5 million. For the one-year ended December 31, 2020, contributions were $11.7 billion, and distributions and redemptions were $14.4 billion, resulting in an annual investor net cash flow of negative $2.7 billion.
NFI-ODCE Investor Cash Flow Trends (4Q Rolling Total, Billions)
Additional details from the NFI-ODCE release are in the attached Snapshot Report.