BRIXX™ Commercial Real Estate Indexes overcome the limitations of appraisal lag, self-reporting, and leverage disparities to establish an accurate, real-time view of commercial real estate markets using publicly traded equity pricing and data.
While almost all asset classes have derivatives markets that dwarf the underlying markets, the real estate derivatives market in the United States is almost nonexistent due to the lack of a true, real-time valuation measurement index.
Traditional indexes like NCREIF rely on appraisal data with significant time delays. Properties aren't reappraised every period, creating stale valuations and artificial seasonality that dampens actual market volatility.
Public market indexes like NAREIT and MSCI include indeterminate levels of corporate leverage, making it impossible to isolate true property-level returns from capital structure effects.
Transaction-based indexes suffer from noise and lack of continuous pricing, while private market data represents less than 10% of investable commercial properties in the U.S.
Five indexes measuring real-time changes in commercial real estate valuations across major property sectors, priced in commodity units for institutional transparency.
Tracks multifamily residential properties including apartment communities and residential REITs. Aggregates approximately $200 billion in property values across 15 leading residential real estate companies.
Measures retail commercial real estate including shopping centers, regional malls, and retail properties. Covers approximately $225 billion in retail property values.
Tracks office properties across major U.S. markets. Represents approximately $130 billion in office property valuations from leading office REITs and real estate companies.
Measures hotel and lodging properties using per-room (key) pricing. Aggregates approximately $85 billion in hospitality property values.
Weighted composite of all four underlying sector indexes, representing the broader commercial real estate market. Aggregates over $640 billion in total property values across all sectors.
BRIXX indexes provide institutional investors with the transparency, liquidity, and precision required for sophisticated real estate investment strategies.
Continuous updates based on live equity market data, eliminating appraisal lag and providing immediate market transparency.
Proprietary methodology removes corporate leverage effects to measure true property-level returns, enabling accurate comparisons to private market benchmarks.
12-month leading correlation to private market real estate benchmarks, providing early signals of market movements.
Priced in intuitive units ($/sqft, $/unit, $/key) that align with how real estate professionals evaluate properties.
Aggregates over $600 billion in property values across 60 publicly traded real estate companies and four major property sectors.
Based on publicly available SEC filings (10-Q, 10-K, 8-K) and real-time equity prices, ensuring full auditability and transparency.
A rigorous, transparent approach to measuring commercial real estate performance using public market data and balance sheet adjustments.
BRIXX indexes are calculated using real-time equity prices from publicly traded REITs and real estate companies, combined with detailed balance sheet data from SEC filings to derive enterprise values and property-level metrics.
Each index component is adjusted for leverage to calculate unlevered returns, representing the true performance of the underlying real estate assets independent of capital structure decisions.
Components are selected based on minimum enterprise value thresholds ($1B+), sector focus (85%+ revenue from target property type), and listing on U.S. securities exchanges.
BRIXX indexes enable sophisticated investment strategies previously unavailable in commercial real estate markets.
Real estate investors can hedge portfolio exposure to specific property sectors or overall market movements using real-time pricing, enabling dynamic risk management unavailable with lagged traditional benchmarks.
The indexes provide the transparency and continuous pricing required for liquid derivatives markets, supporting futures, options, and swaps on commercial real estate performance.
Institutional investors can benchmark private real estate fund performance against unlevered, real-time public market equivalents, with leading correlation providing forward-looking insights.
Separate property-level acquisition decisions from portfolio-level allocation choices, enabling innovative strategies including 130/30 and portable alpha approaches in real estate investing.
BRIXX methodology is grounded in extensive academic research demonstrating the fundamental relationship between public and private real estate markets.
"Lagged REIT returns are highly predictive of private market returns... REITs serve as a fundamental information transmission channel to private market returns... REIT returns simply react to fundamental asset pricing information more quickly than private market returns given their greater liquidity and transparency."
— David C. Ling and Andy Naranjo, Returns and Information Transmission Dynamics in Public and Private Real Estate Markets (2015)
Research shows evidence of cointegration between public and private real estate markets across all four major U.S. sectors, with return volatilities that do not differ significantly when adjusted for leverage.
Martin Hoesli, Elias Oikarinen (2012-2013)
"Real estate asset market pricing seems to share the characteristic of securities markets that much of the volatility and cyclical price movements are driven more by capital market forces than by changes in underlying operating cash flows."
David Geltner (2014)
"Derivatives on US private equity real estate have the potential to reshape direct real estate investment activity. A fully functioning derivatives market would allow investors to separate property-level decisions from portfolio-level allocation choices."
Asieh Mansour, Sandy Naylor (2007)
Commercial real estate represents a massive asset class with growing institutional participation but limited derivatives infrastructure.
U.S. commercial real estate represents approximately $16 trillion in total value, comparable to the Treasury bond market, with roughly $8 trillion in institutional-quality assets.
U.S. real estate transaction volume exceeds $550 billion annually, representing nearly half of global total and more institutional assets than the next three markets combined.
The 2016 creation of Real Estate as a separate GICS sector has led to significantly reduced correlation between publicly traded real estate and the broader equity market.
BRIXX indexes are available to qualified institutional investors, hedge funds, and derivatives market participants. Contact us to learn more about index access, licensing, and derivative product development.
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