In second quarter 2016, the NCREIF Property Index, or NPI, crossed a milestone of one-half billion dollars in market value, with a total of $505.3 billion. The second quarter also marked the fifth consecutive quarter of a downward trend in total return. This trend has been mirrored in the capital return component, while the income return has been less consistent in its trend, yet more moderate since 2015.

The NPI total return was 2.03 percent in second quarter 2016, down from 2.21 percent in the first quarter and 3.14 percent a year ago. The total return consisted of a 1.19 percent income return and 0.84 percent appreciation. The quarterly income return was marginally higher than the prior quarter but has trended lower since 2010, with property values rising faster than income. Appreciation has decelerated considerably from its 1.5 percent per-quarter average pace from 2010 through 2015. Thus, investment performance has become more income dependent this year.

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