Property Appreciation Keeps Slowing: NCREIF

Headquartered at Chicago’s Aon Center, NCREIF says property fundamentals remain solid.

CHICAGO—Quarterly returns for the National Council of Real Estate Investment Fiduciaries’ NCREIF Property Index are staying on trend. Unfortunately, that trend is downward. NCREIF said Tuesday afternoon that the total return for the first quarter of this year was 1.55%, down from 1.73% in Q4 2016 and 2.21% in the same quarter a year ago.

Propelling returns downward has been a steepening curve of depreciation across the $533.8 billion of commercial properties represented in the NPI. Q1’s total income return of 1.15% was comparable to the previous quarter’s, and NCREIF says the income return has been generally stable over the past three quarters. But the appreciation component of the NPI dropped from 0.59% in Q4 ’16 to 0.40% in Q1, continuing a trend of below-1% appreciation.