New NCREIF Value Index and Operations Measures

Abstract Since its inception, the NCREIF Property Index (NPI) has achieved preeminence as an indicator of the investment performance of institutionally-held commercial property in the United States. We introduce three new and refined series derived from NCREIF property data: the Market Value Index (MVI), Free Cash Flow Yield (FCFY), and the Capital Expense Ratio (CXR). While the NPI was designed to measure the risk and returns of the real estate asset class, these series optimize the property-level data in the NCREIF database to provide better indications of real estate value changes and operating performance.