Proven ability to deliver superior income streams to investors

Private real estate has delivered higher income returns than the other major asset classes: public real estate, stocks, bonds, and cash. No wonder private real estate has a well-earned reputation for being a dependable source of passive income.

More effective portfolio diversifier

During past major economic crises, private real estate has been steadier than the public sectors of the market – which exhibit greater degrees of volatility. Compared to public real estate, private real estate has continued to exhibit low correlation to the stock market over the last 20 years.

A harmony of security with return potential

Thanks in part to private real estate’s lower volatility, it has also produced stronger risk-adjusted returns – as defined by a higher Sharpe ratio – than public real estate and other asset classes. Over the past 20 years, private real estate has generated risk-adjusted returns that are nearly two times better than public real estate returns.

Sources: Bloomberg; NCREIF; NAREIT. 20 years ending 12/31/20. Private real estate is represented by the NCREIF Open-End Diversified Core (ODCE) Index, an equal weighted, time weighted index representing a blended portfolio of institutional-quality real estate funds reported net of management and advisory fees (with the exception of the private real estate income data shown, which is reported gross of management and advisory fees). The term core typically reflects lower risk investment strategies, utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. Funds are weighted equally, regardless of size. While funds used in this index have characteristics that differ from net asset value (NAV) REITs (including differing management fees), Centric’s management believes that the NCREIF ODCE Index is an appropriate and accepted index for the purpose of evaluating returns on investments in NAV REITs. Public real estate is represented by the FTSE NAREIT All Equity REITs Index, which is a free-float adjusted, market capitalization-weighted index of publicly traded U.S. Equity REITs. Equities are represented by the S&P 500 Index, an unmanaged index of the 500 largest stocks (in terms of market value), weighted by market capitalization and considered representative of the broad stock market. Bonds are represented by the Bloomberg Barclays US Aggregate Bond Index, an index of securities that are SEC-registered, taxable and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. Bond income return is represented by the yield to worst of Bloomberg Barclays US Aggregate Bond Index. Cash is represented by the 3-Month Treasury Bill Rate, which is the yield received for investing in a government-issued treasury security that has a maturity of three months. Bonds and equities provide ready liquidity and are easily traded. These indices are used in comparison to the NCREIF ODCE Index in order to illustrate the differences in historical total returns generated by commercial real estate, equities and bonds. The prices of securities represented by these indices may change in response to factors including: the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates and investor perceptions. All indices are unmanaged and do not include the impact of fees and expenses. An investment cannot be made directly in any index. The returns presented are not indicative of returns to be attained by NAV REITs. Diversification does not guarantee against the risk of loss. Income return is the portion of a fund’s total return that was derived from income distributions. Income returns for this time period may include return of capital. Comparisons shown are for illustrative purposes only and do not represent specific investments or the performance of NAV REITs. NAV REITs have the ability to utilize higher leverage than is allowed for the funds in the NCREIF ODCE Index, which could increase a NAV REIT’s volatility relative to the NCREIF ODCE Index. There are many material differences among commercial real estate, NAV REITs and traditional fixed income, including but not limited to, differences in fees and expenses, liquidity, safety and tax features. Investors are advised to consider the limitations of investing in commercial real estate, such as decreasing liquidity, increased volatility, and, in the case of NAV REITs, upfront selling commissions and ongoing distribution fees that will have the effect of reducing an investor’s return on his or her investment. An investment in a NAV REIT is not a direct investment in commercial real estate, but rather an investment in a REIT that owns commercial real estate. For more information on the potential risks of investing in commercial real estate or a NAV REIT, please see the applicable section of prospectus or private placement memorandum. Past performance is not a guarantee of future results.

Some of the risks of private real estate investment include the risks that private real estate is illiquid, may have significant fees, and tax consequences. Distributions are not guaranteed and may be funded from sources other than income, which may impact an investment. In addition, the use of leverage can have a significant impact on an investment.

The Sharpe ratio is calculated by subtracting the risk-free rate — such as that of the 3-Month Treasury Bill — from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns.

Past performance is no guarantee of future results. Diversification does not assure a profit or protect against loss.