As I have written before, nothing has been the same since the damaging financial crisis of 2008-2009. So I divided commercial real estate returns (NCREIF and NAREIT indices) to 2002 to 2008 and 2009-2020. The 2009-2020 is marked by the massive intervention of The Federal Reserve (that never went away).
2002-2008, the housing bubble years (green) saw elevated returns for a variety of commercial real estate returns, such as the NPI (National Property Indices) and the NAREIT index. 2009-2020 saw a generally lower return regime for commercial real estate (blue), despite the massive Federal Reserve intervention.
One notable difference is the NAREIT (real estate investment trust) index. During the 2002-2008 period, (green), the NAREIT index had the highest risk (volatility of returns) while the NPI Leverage Only Portfolio had the highest average return (but less risk than the NAREIT portfolio). During 2009-2020 (blue) the NAREIT index had a higher average return than the NPI indices with standard deviation of returns (aka, “risk” being about the same as the NPI Levered portfolio.
The basic NCREIF index (NPI research) is an unleveraged index and is lower in returns post Fed intervention. T-bill returns show the same pattern, lower in 2009-2020 with the omnipresence of The Fed. I don’t look at NCREIF returns prior to 2002 given reporting problems with the NCREIF data.
And here is a chart comparing commercial real estate returns with the Case-Shiller National Home Price index (YoY0
Nothing has been the same since the US housing bubble and subsequent financial crisis of 2008-2009.