The return for institutional investors as measured by the NCREIF Property Index (NPI) was –0.99 percent in the second quarter, which was a decrease from the 0.71 percent return for the prior quarter. This is the lowest return since fourth quarter 2009.

The leveraged return for those properties in the index that have leverage was –2.76 percent for the quarter because the properties were earning less than the cost of debt. The total return turned negative for the quarter because the capital return (change in value net of any capital expenditures) of –2.00 percent offset the net operating income (NOI) return of 1.01 percent.

Both rent and NOI growth rates experienced the largest decline since NCREIF started collecting data, which goes back to 1978 for NOI and 2001 for rents. Not surprisingly, hotels had the greatest rent decline, falling 48.73 percent due to the impact of COVID-19, followed by retail with a 12.68 percent decline. Total returns were lower for all pro