The Office Real Estate SCTR℠ Index measures the performance of publicly-traded real estate securities, primarily Real Estate Investment Trusts (REITs), of exchange listed companies in the U.S. that own and manage various forms of office real estate and rent space in those properties to tenants. The office securities include real estate investment trusts that specialize in different properties and markets such as skyscrapers, office parks, government agencies, and central business districts.
Office properties have long cycles with cash flows that tend to be stable: Lengthy lease durations (10 years or more for urban offices) provide long-term cash flow visibility.
Market participants should think about office as a pure domestic economic play and with keeping an eye on emerging trends such as shared office space and short term office leases with amenity rich spaces.
Office rents may be expected to rise, on average, with inflation, which will generate reasonably good returns for office owners.
|NUMBER OF HOLDINGS:||24|
|WEIGHTING:||MODIFIED MARKET CAP|
TOP 10 HOLDINGS
Top 10 Holdings
As of 01-17-2019
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” “DESK” 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 Office Real Estate SCTR℠ Index||DESKSCTR||Total Return||NASDAQ|
DESK Returns: Not All Real Estate is Created Equal
DESK℠ 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.
Benchmark DESK 1YR Percentage Returns
Benchmark DESK 3YR Percentage Returns
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