The Benchmark Apartments & Residential 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 residences and rent space in those properties to tenants. The residential securities include real estate investment trusts that specialize in apartment buildings, student housing, manufactured homes and single-family homes.
Apartment and Residential real estate tends to have stable cash flows, and their prospects are influenced by employment and wage growth, household formation, and the single-family home markets. Apartment owners do well when the economy is expanding because of the new jobs thereby created and the rise in the formation of new households.
Today’s renters are a different breed who want a place offering a convenient, quality lifestyle, a comfortable living space, a place to exercise, and a place to socialize all in one package. According to the government, the biggest change in the renting population came from seniors aged 55 and over and the PAD sector is positioned to capitalize on this demographic change.
Publicly traded apartments have a long history of superior asset appreciation as their Class A properties historically double in value every 10 years (Cushman & Wakefield)
|NUMBER OF HOLDINGS:||20|
|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” “PAD” and “SCTRs” servicemarks. 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 Apartments & Residential Real Estate SCTR℠ Index||PADSCTR||Total Return||NASDAQ|
PAD℠ Returns: Not All Real Estate is Created Equal
PAD℠ 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 PAD 1YR Percentage Returns
Benchmark PAD 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