The Benchmark Industrial Real Estate SCTR℠ Index measures the performance of publicly-traded real estate securities, including Real Estate Investment Trusts (REITs), of exchange listed companies in the U.S. that primarily own and manage industrial properties and facilities (including warehouse/industrial and storage) and rent space in those properties to tenants.
INDS℠ Returns: Not All Real Estate is Created Equal
INDS℠ Returns vs. Benchmark SCTRs℠ and FTSE Nareit Indexes demonstrate how each property type has its own set of investment characteristics, including individual economic cycles and risk factors, competition threats, and growth potential. Real Estate SCTRs℠ provide tailored solutions for commercial real estate investment management. There is significant dispersion of market multiples (Share Prices/Fund From Operations) and returns throughout the property sectors. SCTRs℠ give market participants direct access to the property class they desire.
Portfolio Application & Uses
Risk Management &
Strategic Real Estate
Industrial real estate serves as a way to play the burgeoning e-commerce sector. The sector has seen robust absorption from rising manufacturing data due to the tectonic shift in e-commerce purchases. Well-located industrial assets are the backbone of the logistics network, and e-commerce retailers are fiercely competing for space in these distribution centers as the sector is still in the early stages of absorbing the impact of the growth of e-commerce.
Industrial real estate has seen a substantial increase in rents and cap rate pricing, especially in so called “last mile” markets near major metropolitan cities. Economic drivers include: Exports; manufacturing activity; inventories; shipping volumes; business sentiment
Ownership is highly fragmented, and the public REITs own only about 1 percent of all industrial real estate. Despite long lease durations, industrial properties have short construction times due to less-complex building requirements, so supply tends to closely track demand. A shorter property cycle results in greater sensitivity to domestic and global economic growth.
TOP 10 HOLDINGS
Benchmark Real Estate SCTR℠ proprietary holdings and performance history are provided upon request. SCTR℠ indices are protected through various intellectual property rights and unfair competition and misappropriation laws. In particular, Benchmark Investments has registered the “SCTR” “INDS” and “SCTRs” service marks. Benchmark requires a license to launch any product whose performance is linked to the value of a particular SCTR℠ index, for example, derivatives, bonds, swaps and OTC products and for all use of the SCTR℠ name or name of the SCTR℠ index in the marketing of the product. See the Terms of Service for more information.
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|Benchmark Industrial Real Estate SCTR℠ Index||INDSSCTR||Total Return||NASDAQ|
Advantages of Real Estate SCTRs
Correlation and risk-adjusted return metrics demonstrate that listed equity real estate investment trusts provide optimal exposure to the real estate asset class.
Allows investors to take or adjust positions quickly and efficiently by buying and selling positions corresponding to the weights of all constituents which are traded on liquid public markets such as NYSE & Nasdaq.
Provides direct access to institutional office real estate diversified over many geographic areas and management teams without investing in properties or with a real estate equity managers
Portfolio Investment Thesis
Real Estate SCTRs℠ provide tailored solutions for commercial real estate investment management. Main drivers for each real estate SCTR℠:
- Market “cap rates”
- Supply/ demand conditions
- Competition from nearby properties
- Employment growth
- Consumer and business spending
- Interest rates
- Lease revenues
- Property expenses
- Occupancy rates
- Prevailing market rental rates
- Tenant quality and replacement cost