performance-attribution

CRE fund return decomposition separates total returns into income, NOI growth, cap rate change, leverage, and amortization components to isolate alpha. It requires fund details, property acquisition prices, current values, NOI history, and cash flows as inputs.

Performance attribution applies NCREIF NPI and ODCE benchmark overlays to compare fund returns against industry indices. It decomposes alpha by measuring the fund's excess return over the benchmark across vintage-year, same-store NOI, and gross-to-net analysis dimensions.

Calculating same-store NOI growth and gross-to-net returns for LP reporting involves inputting property-level NOI history and cash flows, then applying leverage and expense parameters to isolate net performance from gross asset-level returns.

Vintage-year attribution for value-add strategies requires cap rate change and leverage data to accurately separate organic appreciation from leveraged returns. The analysis also uses acquisition prices, current values, and fee structure inputs to quantify alpha.

Committee presentations can still be generated without a fee structure or leverage target by using optional leverage and expense parameters. The decomposition will focus on income, appreciation, and benchmark overlays, though gross-to-net alpha precision is reduced.

CRE performance attribution may show negative alpha despite same-store NOI growth when cap rate expansion offsets income gains or when leverage costs and fee structures erode net returns below the NPI or ODCE benchmark overlay.