Real Estate Rakes in Returns

An article in the October issue of Mutual Funds magazine compares the averaged 5-year return of the S&P 500 versus investments in commercial real estate. The graphic, broken into eight United States regions, was developed by Morningstar, Bloomberg and the National Council of Real Estate Investment Fiduciaries.

During the last five years through March, the S&P 500 averaged a 10.2 percent annual return for investors.

Real estate in the four-state southwest region, comprised of Arkansas, Louisiana, Texas and Oklahoma, yielded an 11 percent return. The best real estate returns came in the Pacific region comprised of Washington, Oregon, California and Alaska (15 percent).

The weakest real estate returns were in the “eastern north central” zone (9.6 percent) that was made up of Minnesota, Wisconsin, Iowa, Indiana and Illinois.

Every region’s real estate investments outperformed the Nasdaq 1000 and Lehman Brothers aggregate and government bonds.