Are You Benchmarking Your Returns?

Contributed by Marty Busekrus, SIOR, CCIM, Managing Directory at Ciminelli Real Estate Services  - South Florida

If you're not benchmarking your returns, how do you know how well your asset is performing against its peers? Benchmarking simply means comparing the returns of your investment to another broader index or investment. For example, did your brokers stock picks beat the S&P 500 last year? The Dow Jones Industrial Averages?

In commercial real estate that's a bit trickier. Public REIT’s typically benchmark to the NAREIT index which is a group of publicly traded REIT’s. Large, institutional investors use one of the many NCREIF (or National Council of Real Estate Investment Fiduciaries) indexes. Typically it’s the Open end Diversified Core Equity index (or ODCE) for short. 

Our firm, Ciminelli Real Estate Services, has developed a model that allows private owners to track their returns quarterly and benchmark them against their peers within the ODCE index.  This allows both private and institutional owners to see how good of operators they really are and also helps tell a good story when raising future funds. 

The truth is, the best property managers act like asset mangers. So ask yourself:

  • Is your management team able to benchmark your asset against its peers in the NCREIF ODCE index or NAREIT?
  • Do they hold multiple accreditations and are they competing against other property managers through awards like the BOMA TOBY awards?
  • Are they able to provide advanced lease analysis that helps owners structure lease with the best financial outcomes?
  • And do they have a deep understanding of the financial impacts of their decisions and how it affects value?

Our team at Ciminelli checks all these boxes, and more! We'd love to talk with you more on this topic, and answer any questions you have about the commercial management services we provide.


To view a video presentation on this topic > Click Here