About REAL
Real Estate Analytics LLC is an innovative provider of real estate capital markets solutions serving the institutional investor marketplace worldwide. The company was formed to commercialize a series of proprietary transaction-based commercial property indices to improve market transparency and objectivity in commercial real estate pricing. These indices also provide a foundation for an array of new products and services to support the real estate capital markets and portfolio management and optimization businesses.
Developed in conjunction with the MIT Center for Real Estate using data from Real Capital Analytics; the REAL indices, which represent nothing short of an industry breakthrough, capture the change in commercial real estate asset prices. This is accomplished with greater objectivity and transparency to better understand portfolio asset prices. Today, the 29 indices are published as the Moody's/REAL Commercial Property Price Indices (Moody's/REAL CPPI). The monthly national index is arguably the closest representation of true market beta than anything that has existed previously. It is often referenced in the world's most prestigious business publications including, but not limited to, the Wall Street Journal, The Financial Times, and The Economist.
In addition to serving as a valuable and objective performance benchmark, the REAL CPPI form part of the foundation for the company's suite of research and analytic products aimed at improving the portfolio management investment process.
Recognizing that no one product or index can meet to diverse needs of all our clients, REAL's products access all available market tools (including non-REAL indices) to deliver custom solutions and superior performance on behalf of the client.
Available to a wide range of institutional investors REAL's products can and will include:
- OTC derivative products which reference the various CPPI
- Structured products that isolate CRE risk and returns
- Benchmarking Services
- Analytical tools that identify value-at-risk
- Portfolio optimization tools
Using these products, REAL also provides specialized advisory and trading services to assist institutional investors in obtaining, disposing of, and managing market risk in commercial real estate portfolios.
These services run the gamut from portfolio valuation to straightforward derivative transaction execution, to advising on and implementing structured product solutions. The structured solutions group also advises on portfolio construction and optimization. Applying a more true measure of beta to a portfolio allows REAL to help its clients more accurately track portfolio performance and thereby more effectively isolate and manage the alpha of the portfolio for those that seek it.
These products are critical in today's market environment.
Until the launch of the indices in 2006 there was no reliable data with sufficient history for measuring real estate values using actual transaction prices. As a result, the industry had no choice but to rely on a subjective appraisal-based methodology that is inherently weak when applied with insufficient price transparency and low transaction volumes for similar properties. Most people now accept that appraisal-based valuation methodologies are known to be inferior in the face of properly constructed transaction-based data available sufficient volumes.
