The real estate industry has a data problem — and almost no one wants to talk about it.
Every quarter, managers publish IRRs, equity multiples and time-weighted returns. Databases aggregate these numbers and sell them to investors and investment managers. Wealth advisers use them to guide investment program selection and client decisions.
And yet, behind the scenes, everyone knows the truth: Most real estate performance numbers are not comparable. Not even close.
The problem is not the math. It is the lack of standards.
The illusion of precision: Real estate is an appraisal-based asset class. Properties do not trade daily. Valuations are subjective. Managers differ in how they treat expenses, capital improvements, fees and cash flow timing.
But when performance numbers are published, they are presented with decimal point precision — as if they were as reliable as stock market returns. They are not.
IRR — the
