- June 1, 2017: Vol. 29, Number 6

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Balancing act: Institutional real estate sees healthy income, weak appreciation

by Sara Rutledge

The quarterly NCREIF Property Index (NPI) total return has been on a downward trend for two years. Reflecting performance of 7,139 properties and $533.8 billion of market value, the first-quarter 2017 total return was 1.55 percent, down from 1.73 percent in fourth quarter 2016 and 2.21 percent a year ago.

The first-quarter 2017 NPI total return consisted of 1.15 percent income return and 0.40 percent appreciation. The income return, although modest, has been relatively stable over the past three quarters. Appreciation has led the downward return trend since 2015, and first quarter 2017 marks the fourth consecutive quarter of sub-1 percent appreciation. For the trailing year, the annual NPI total return was 7.27 percent, consisting of 4.73 percent income return and 2.45 percent appreciation.

Appreciation, even at modest levels, resulted in the Market Value Index (MVI) achieving another new high in first quarter 2017. The MVI is a NCREIF measure, similar to a price index

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