National NCREIF Property Index returns in the U.S. 2007-2023

In 2023, the value of the national NCREIF Property Index in the United States declined for the first time since 2009. The annualized total return of the index fell to negative 7.9 percent 2023. The NCREIF Property Index reflects the change in prices of commercial real estate for investment purposes in the United States. Just two years ago, in 2021, the rate of return of the index hit 17.7 percent.

Property types with the highest cap rates

Cap rates, which measure the expected return rate of a real estate asset, were the highest for retail properties in 2023. While a higher cap rate indicates a higher rate of return, it is also associated with higher risk: The multifamily sector, which has enjoyed steady and robust growth in recent years, had the lowest cap rate of all commercial property types. 

Commercial property area with the best development prospects

In 2023, the investment opportunities for industrial or distribution real estate were deemed to be the best when compared with other types of commercial property. Industrial real estate includes warehouses, factories, and big box distribution centers.