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| Portfolio Considerations in Commingled
Real Estate Funds Author: Stuart Fletcher Start Page: 171 Abstract: This study examines
the return rates on portfolio characteristics of eighteen diversified CREF's from 1983
through 1988 using regression analysis and paired comparisons of funds. The purpose of the
study is to examine the relationships between CREF-specific characteristics and CREF
return. Over the sample period, the size of the real estate investment and the level of
liquidity within a CREF portfolio were found to be positively related to return, the use
of leverage was found to be beneficial only when nominal return on CREFs was relatively
high compared to interest rates on mortgages, and the size of the fund was found to be
negatively related to return. This latter finding is opposite findings in earlier studies,
suggesting previously unobserved cyclical performance for CREFs. Finally, CREF management
fees were not found to be positively related to performance over the sample period. |
