Preqin calculates real estate market benchmarks using performance returns for over 1,100 real estate funds, across all regions and vintage years. As real estate funds that include the US within their region focus make up a large proportion of all real estate funds in market (63%), it is interesting and informing to take a look at the performance of this region when looking at the real estate industry as a whole.
Preqin has calculated the median net IRRs and quartile boundaries by vintage year for real estate funds which primarily focus their investment activities in the US. The results show that the top quartile boundary net IRRs are positive across all vintages, with 2002 vintage funds requiring a net IRR of 28.0% in order to fall in to the top quartile. The bottom quartile boundary is also positive for most vintages, with the exception of funds with vintages 2004-2007 which have a bottom quartile boundary of less than 0%. The median net IRRs are also positive for most vintages, excluding 2005 vintage year funds, which are in negative territory with a median net IRR of -0.6%. The highest median net IRR is for 2002 vintage year funds with a return of 23.0%. The more recent vintage year funds have a higher bottom quartile boundary than those of vintages 2004-2007, despite these funds being early in their investment cycle. However, these returns could change as the fund progresses.