Commercial Real Estate Investments Hang Tough

Despite the sputtering economy, credit crisis and sagging dollar, the commercial real estate market is growing–unlike other investment areas. Commercial property for the four quarters ended March 31, 2008, showed a total return of 13.6 percent, according to the NCREIF-NPI index, which serves as the gauge of the sector’s investment performance. The TIAA-CREF Weekly Market Monitor for June 2 reported that the total return includes income of 5.41 percent and capital appreciation of 7.86 percent. All four major property types shared in the strong performance, continued the Monitor. Office produced a returns to 17.5 percent, with industrial at 13 percent, retail at 11.6 percent and apartment at 9.6 percent. At the same time, the National Association of Real Estate Investment Trusts (NAREIT) reported that the FTSE NAREIT All REIT Index rose 6.46 percent through the first five months of 2008, while the FTSE NAREIT Equity REIT Index rose 8.17 percent. Property and companies that own property are performing relatively well; by comparison, all of the major stock barometers fell over the period: NASDAQ declined by 4.89 percent; the Dow Jones Industrials fell 4.72 percent; the S&P 500 lost 3.80 percent; and the Russell 2000 slipped 1.81 percent.