The NCREIF Property Index (NPI) achieved a quarterly total return of 3.23 percent in second quarter 2022, which is down from 5.32 percent in the first quarter but still above the NPI’s average historical quarterly of 2.25 percent. The quarterly return consisted of 0.97 percent from income and 2.26 percent from appreciation. Appreciation is after the deduction of capital expenditures. Market values before considering capital expenditures increased by 2.49 percent, which propelled the index to another historical high.

The 3.23 percent return is the unleveraged return for what is primarily “core” real estate held by institutional investors throughout the United States. Properties with debt financing had a leveraged total quarterly return of 4.06 percent. As of quarter-end, there were 4,463 properties with leverage, and the weighted average loan-to-value ratio was 41 percent. The average interest rate on the leveraged properties rose from a record low of 3.43 percent in the