Commercial Real Estate- Historical Rate of Return - Posted by WD Hamilton

Posted by JT-IN on July 15, 2002 at 10:02:22:

WD:

I cannot point you in the direction of the source that will give you the hard and fast IRR number you are looking for. However, what I want to mention is, historical property is heavily tax driven, in the form of “Tax Credits”. Investors seeking historical properties are usually buying a “Tax Break”, as much as the underlying investment.

So, when you find your source, be certain to evaluate the impact of the “Credits” that were given/taken against these projects. This will skew any numbers either into or out of making any sense, either by adding the tax benies or taking them away.

Traditionally, these projects haven’t done very well overall. I’m certain there are exceptions, but my personal knowledge of a few projects is akin to donating funds for a museum or such… you get some tax benies and a warm feeling. Maybe the develpoer makes out, but the underlying investors usually don’t.

Just the way that I view things…

JT-IN

Commercial Real Estate- Historical Rate of Return - Posted by WD Hamilton

Posted by WD Hamilton on July 15, 2002 at 09:27:47:

I am a student currently working on a paper that examines historical rate of return (IRR) on commercial real estate development. Specifically, I am looking for sources of historical investment statistics on mixed use, industrial/retail developments in Northeastern US (1985-present). As an example,what would be the desired rate of return be for an investor or developer for this type of commercial development in 1989? Or, what has been the actual rate of return through this time period? Is there a source out there that has this type of data?

Thanks

Places to check out - Posted by CH

Posted by CH on July 16, 2002 at 24:20:12:

Looks like your going to have to do some research. Here are a few possible places to check out:

Real Estate Research companies:


comps.com
landauer.com

Real Estate Investment magazines: (I?ve seen the information you?re looking for in these magazine a long time ago)

nreionline.com
cpnonline.com

Good Luck!

p.s. A “general” IRR in 1989 was 18-20%

Re: Commercial Real Estate - Posted by Jim Rayner

Posted by Jim Rayner on July 15, 2002 at 11:09:09:

this may be of some help

http://www.nareit.com/researchandstatistics/chartbook.cfm