Total returns on private real estate funds have improved over the last three quarters, helped by a reversal in declining prices and income providing a steady 0.9% to 1% a quarter. The NCREIF Fund Index - Open End Diversified Core Equity second-quarter return was -1.6%. Although prices dropped by 2.5%, income added 0.9%. The third quarter saw returns improve to 0.5%. Prices fell by 0.5%, but the income component pushed the total return into positive territory.
In the fourth quarter, the total return was 1.3%, with prices climbing by 0.4%, reversing the previous two periods' slide, and income accounting for the balance. In the first quarter of 2021, private real estate funds returned 2.1%, broken out into a 1.1% price gain and 1% from income.