Posted by Carl on January 03, 2005 at 15:42:35:
The various types of commercial real estate are generally roughly correlated in their performance, but there can be significant and important differences. For example, in 1991 (which was a bad year for commercial real estate), apartments had a -1.35% return on a national basis. But office buildings took a big whack, with a -11.44% return, according to NCREIF data. Furthermore, the year 1991 was the only year in the last 26 with negative returns for apartments, while office buildings got way overbuilt and had four years of negative returns in the early 90’s. So while a rising tide does tend to lift all the real estate ships, the effects can and do vary somewhat, depending on the type of boat you are in.
=Carlos=
P.S. If you are looking for negative correlations among the various sub-types, I haven’t seen that on a national basis. On a local market basis, that may very well be possible.