Real estate returns for institutional investors, as measured by the NCREIF Property Index, dropped again during fourth quarter 2018 but still managed to have positive price appreciation (net of capex). The current quarter’s total return was 1.37 percent down from 1.67 percent last quarter. The total return consisted of an income return of 1.11 percent and a capital return of 0.26 percent. These are unleveraged returns for what is primarily “core” real estate. The average quarterly return over the past five years was 2.28 percent or 9.85 percent annualized.

Industrial properties, which are primarily warehouse assets, continue to be the outstanding performer, with a return of 3.40 percent for the quarter, which was up from the prior quarter return of 3.36 percent. Office followed with a return of 1.65 percent, followed by apartment at 1.35 percent, hotel at 1.21 percent and the continuing laggard retail had a negative 0.43 percent return for the quarter. This is the first