Publications

- September 1, 2022: Vol. 16, Number 8

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Winter is coming : Be prepared, and be careful

by Geoffrey Dohrmann

It has been nearly 14 years since the collapse of Lehman Brothers on 15 September 2008. In response, total returns posted by the NCREIF Fund Index — Open End Diversified Core Equity (ODCE) declined 10 percent in 2008 and another 29.7 percent in 2009.

Ever since, ODCE has posted positive returns for 12 consecutive years (including the first few quarters of 2022). Seven of these years  posted double-digit returns, with total returns ranging between a  low of 7.62 percent in 2017, and a high of 22.18 percent in 2021.

The prior downturn in returns happened in response to the US savings and loan crisis of the early 1990s. Following that much less severe decline in total returns (6.26 percent in 1991 and 5.5 percent in 1992), the index posted 15 consecutive years of positive returns, nine of which were in double digits.

When will we see the next correction in the real estate markets? Many have posited that continued rising interest rates will eventually spell the

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