Research - APRIL 28, 2014

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NPI returns increase in first quarter, led by retail

by Reg Clodfelter

Commercial real estate returns increased in the first quarter, according to the National Council of Real Estate Investment Fiduciaries, which released the first quarter results for the NCREIF Property Index. The NPI saw total returns come in at 2.74 percent — split between 1.31 percent from income and 1.44 percent from appreciation — 21 basis points higher than the fourth quarter 2013 returns. The index also saw occupancy and NOI growth increase slightly and cap rates compress during the quarter

The retail sector topped the industrial sector, which had been the index’s leading performer since this time last year, by turning in the most lucrative quarter in four years, returning 4.30 percent, divided between 2.92 percent from appreciation and 1.38 percent from income. Retail also topped all other property types on a rolling four-quarter basis, returning 13.50 percent over the period, slightly higher

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