Institutional Real Estate Americas

December 1, 2014: Vol. 26, Number 11

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From the Current Issue


NCREIF, Altus Group partner on new data platform

NCREIF is renowned for its historical real estate performance data. The Altus Group has developed a strong reputation for its forward-looking valuation data. Together, the organizations believe they have created the best package of attribution analysis products in the real estate business.


Study: Real estate improves DC plan outcomes

With real estate–rich defined benefit plans shrinking and real estate–poor defined contribution plans expanding rapidly, the real estate investment industry is feeling a sense of urgency to make deeper DC plan inroads. It might have just got some valuable help.


New study favors REITs for total net returns

The battle over whether private real estate or publicly traded REITs are a better investment carries on. But the REIT side of the debate just got some additional bragging rights from a newly released 14-year study of asset classes based on actual return and fee data provided by more than 300 U.S. defined benefit plans with $2.8 trillion of assets under management. 


In the zone: Overlooking zoning ordinances can result in higher costs, delayed closings and lower asset value

When discussing real estate due diligence, people in the industry typically think of property condition assessments, environmental site assessments, title insurance and appraisals. Often absent from the discussion are zoning compliance reviews. This can be a critical oversight, as nonconformance or noncompliance with zoning ordinances or other municipal codes can result in higher costs, delayed closings and impairment of an asset’s value.


AEW embarks on $5b European property grab

Already holders of €18 billion ($22.3 billion) in European real estate, AEW Europe is looking to add to its cache to the tune of $5 billion during the next three years, and expects to spend $4 billion of that by the end of 2015.


Attribution: What it is and how it is measured

One of the hottest topics in commercial real estate, especially for open-end funds, is performance attribution. Investopedia defines it as “a performance-evaluation tool used to analyze the abilities of portfolio or fund managers. Attribution analysis uncovers the impact of the manager’s investment decisions with regard to overall investment policy, asset allocation, security selection and activity. A fund or portfolio’s returns are compared to a benchmark in order to determine whether a manager is actually skilled or just lucky.” 


For the ages: Counting time in airline miles and cloud formations

At 63 years of age, I’m still spending a good deal of my time on airplanes. Right now, rather late on a Thursday evening, I’m sitting in a plane at 30,000 feet somewhere over the heartland of America on my way back to San Francisco, after a week of meetings and conferencing in New York City and Montreal.


Returns on U.S. farmland are finally slowing

U.S. farmland has been growing profits for investors by the bushel. Until the most recent quarter, that is. The NCREIF Farmland Index reports third quarter 2014 produced the lowest quarterly return since third quarter 2010. The total return for the quarter was 1.45 percent, comprised of 0.48 percent appreciation and 0.97 percent income return. This was below total returns of 2.94 percent for third quarter 2013 and 1.73 percent for second quarter 2014.


Hotel investment horizons: Three rules of thumb that asset managers should sometimes break

The common goal for hotel operators and those who provide asset management on behalf of owners and investors is generally to maximize income with the minimal capital necessary to maintain the quality and value of the hotel. Typically this entails effectively marketing the property, driving revenue per available room and investing wisely. This is a sound strategy for a long-term owner such as a public REIT, which typically holds an asset for a minimum of seven to 10 years. 

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