Modeling Office Returns at the Regional Level

Abstract

Investors have two problems using the National Council of Real Estate Investment Fiduciaries (NCREIF) data to make decisions. The first is that every day they are making bets based on what will happen, not what has already happened. Although the future of real estate is influenced by its past, performance in the future will not be the same. The second problem is the obvious fact that different economies and real estate markets across the country perform differently during the course of the business cycle. A national index misses these differences.