NAREIT headquarters Nareit headquarters in Washington, DC; the association sponsored the CEM Benchmarking study. (Photo: Tishman Speyer)

WASHINGTON, DC—Listed equity REITs outperformed all other asset classes over an 18-year period, according to a study charting the performance of 200 public and private pension funds with a total of $3.5 trillion in assets under management. That being the case, the study by research firm CEM Benchmarking also found that pension funds continue to favor hedge funds in their allocations, although only “Other US Fixed Income” had poorer returns during the study period.

Commissioned by Nareit, the CEM study found that listed equity REITs generated average total annual net returns of 11.4% between 1998 and 2015. Although private equity’s average gross return was higher at 13.1% per year, expenses whittled the asset class’ average net return to 11.1%, 30 basis points lower than that of equity REITs. Conversely, REITs’ low fees boosted their net returns, the study found.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.

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