TAILIEUCHUNG - Indices for Investment Benchmarking and Return Performance Analysis in Private Real Estate

Social sustainability emerges from ideas about good corporate citizenship and social responsibility. When used in conjunction with triple bottom line frameworks, the term implies that humans matter at least as much as economics and the environment. It is concerned with the durability and function at 3 levels: the broad scale of social networks, the more intimate level of relationships, and the individual quantum of well-being. All 3 of these levels feed into the productivity mix. Moreover, a major implication of sustainability is that a balance of these 3 dimensions will result in more durable productivity than incongruent levels. | Indices for Investment Benchmarking and Return Performance 93 International Real Estate Review 2007 Vol. 10 No. 1 pp. 93 - 118 Indices for Investment Benchmarking and Return Performance Analysis in Private Real Estate David Geltner George Macomber Professor of Real Estate Finance Department of Urban Studies Planning Massachusetts Institute of Technology Cambridge MA 02139 E-mail dgeltner@ David C. Ling William D. Hussey Professor of Real Estate Department of Finance Real Estate Warrington College of Business Administration University of Florida Gainesville FL 32611-7160 E-mail ling@ In . commercial real estate markets a single index product produced by the National Council of Real Estate Investment Fiduciaries NCREIF has been used for both asset class research and for agent evaluation benchmarking. While the NCREIF Index is an invaluable tool for the . real estate investment industry in some respects its construction is not optimized for either research or the benchmarking function though the gap between the reality and the ideal is arguably greatest on the research side. This paper first discusses the purpose of the ideal research index the optimal depth and breadth of market coverage and the type of information included in the research index database. This discussion is followed by an analysis of the ideal agent evaluation benchmark index including the definition purpose and uses of evaluation benchmarking the characteristics of the ideal benchmark index market coverage and information considerations and a comparison of benchmark indices in the private real estate market to comparable indices used to benchmark public securities. Keywords benchmarking return performance agent evaluation private real estate investment 94 Geltner and Ling Introduction and Definition of Index Types Geltner and Ling 2000 2001 argue that it is critically important to distinguish between two types of commercial real estate index products 1 agent evaluation benchmark

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