Although returns for commercial real estate have been somewhat modest this past year, returns for fourth quarter 2017 were the highest of the year, according to the NCREIF Property Index (NPI). The NPI reflects investment performance for 7,527 commercial properties, totaling $559.8 billion of market value owned and managed by the nation’s largest institutional investors and pension funds.

The total return was 1.80 percent in the fourth quarter, up from 1.70 percent in the previous quarter, and higher than the 1.73 percent return for fourth quarter 2016. For the year ended Dec. 31, 2017, the return was slightly less than 7 percent. This is an unleveraged return for what is primarily core real estate held by institutional investors throughout the United States.

The average quarterly return over the past five years was 2.48 percent, or 10.30 percent annualized. Although the current quarter’s return of 1.80 percent, or 7.40 percent annualized, is down from the torrid p