What is the NFI-ODCE Index?
PREDEX operates within the NFI-ODCE guidelines for leverage, property type and geographic diversification. Since 1978, the NFI-ODCE has been widely used to represent the stabilized, income-producing commercial and multi-family real estate market. Funds included in the NFI-ODCE invest in private equity real estate and operate under a strict set of criteria:
- Real Estate. At least 80% of the fund’s gross assets are invested in private equity direct real estate.
- Domain. At least 95% of the market value of real estate must be invested in the U.S.
- Property Types. At least 75% of the market value of real estate must be invested in office, industrial, apartment and retail property types.
- Stabilized. At least 75% of the fund’s gross assets must be invested in properties that are 75% or more leased.
- Leverage. Leverage is limited to 35% of the market value of total gross assets.
- Diversification. No more than 60% of the market value of real estate may be invested in one property type, and must be invested in three of the four main property types, with a minimum of 5% in each of the three types. No more than 65% in one geographic region.
Funds in the NFI-ODCE must also comply with the NCREIF PREA Reporting Standards, including annual external appraisals and audits, quarterly valuations, and time-weighted returns.