10-year rolling private real estate returns have been generally consistent
Private real estate, through the many economic ups and downs since it has been officially measured in 1978, has never experienced a 10-year annualized return below 4%. Thus, if one invested at the worst possible moments of each decade (a market peak, right before a downturn), 10-year annualized returns would have ranged from 4%-6.2%. Private real estate average 10-year annualized returns by decade have ranged from 6.2%-10% and in the strongest 10-year periods of each decade, have ranged from 9.3%-13.2%. Given the recent private real estate drawdown, allocating today could generate returns closer to the historical maximums. We believe this makes a very compelling case for private real estate as a long-term allocation in client portfolios and not as a timing vehicle.
Source: Original chart courtesy of Principal Asset Management
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