‘Foong on Finance’ with Keat Foong: Apartments Will Yield 11.4% this Year, Say Investment Managers

The Pension Real Estate Association (PREA) surveyed some of their member firms in May regarding their forecasts for the U.S. commercial real estate markets. Respondents predict apartment investments will register a total investment return of 11.4 percent this year.

Total apartment investment return (on the NCREIF Property index) is expected to fall in subsequent years, though, to 9.3 percent and 9.2 percent in 2011 and 2012, respectively.

The apartment investment returns prediction for this year breaks down to 5.5 percent in income returns, and 5.9 percent in appreciation returns.

Sixteen firms participated in the survey this quarter, with the firms representing some of the most widely respected investment managers, advisors and researchers in the U.S. property markets, says PREA. The report provides the average forecasts from the sample firms.