US property values creep higher

According to the FTSE NAREIT PureProperty Index Series property values across the US increased by 0.4% in February. The PureProperty Index Series was launched last year to provide a daily measure of US real estate price and total returns at the level of both property (unlevered) and equity investments.

Brad Case, NAREIT’s senior vice president for research and industry information, noted that February was marked by “a marginal increase in property values, even though we saw a marginal decline in total returns for REITs.” Case went on to comment that the reason for the disconnect between REIT returns and property values is that REITs borrow money to invest in their properties and have to make payments on that money.

The PureProperty Index Series showed that the strongest growth areas in February were seen in the South, with a month-on-month increase of around 0.75%. The Midwest and West also performed well in February.