With $472 billion of market value, the NCREIF Property Index closed 2015 with the highest annual total return since 2011, at 13.33 percent. The NPI total return trended down modestly each quarter of the year, however, primarily because of slower appreciation. The NPI total return for the fourth quarter was 2.91 percent, down from 3.09 percent in the third quarter and 3.04 percent in fourth quarter 2014. The fourth quarter 2015 total return comprised a 1.20 percent income return and a 1.72 percent appreciation return. The annual total return in 2015 was 13.33 percent and consisted of a 5.01 percent income return and an 8.03 percent appreciation return.

Among the 7,225 qualifying NPI properties, 52 percent utilize leverage, with a combined loan-to-value ratio of 41.4 percent. Trends in both these measures indicate a more conservative attitude toward debt. The share of NPI properties with leverage has edged back to where it was at the start of the recovery in 2009. In addition,