REAL ESTATE is a key DIVERSIFIER for strong INVESTMENT PORTFOLIOS.
For decades, institutional investors have diversified their portfolios with commercial real estate. JLL Income Property Trust empowers a broader community of investors to access this cornerstone asset class and complement their portfolios with a range of benefits.
High-quality core commercial real estate as an asset class has historically outperformed most other asset classes, delivering a 7.1% annualized total return over the last 15 years ending in 2020. This exceeded the returns on corporate bonds over the same time period.
Income has been an essential component of the attractive long term total returns provided by commercial real estate as an asset class. Historically, 70% of the total returns from commercial real estate, according to the NCREIF Index, have come in the form of income rather than capital appreciation. Over the last 20 years, the annual income returns generated from investing in commercial real estate have been more than 2.5 times higher than stocks and lagged bonds by only 50 basis points.
Real estate income over the last 25 years has increased at nearly the same average annual rate as inflation (2.92% vs. 2.31%). In contrast, bonds are a “fixed income” investment, which means the income they generate does not increase with inflation, exposing the investor to the risk that inflation will erode the value of future interest payments. Similarly, principal payments do not grow at maturity, whereas real estate may appreciate over time, especially during periods of high inflation. An investment in bonds differs significantly from an investment in commercial real estate, and bonds are considered to be a less risky investment than commercial real estate.
Modern portfolio theory suggests that the most effective way to maximize returns while at the same time minimizing risk is to add uncorrelated assets. Within the context of a multi-asset portfolio (composed of stocks, bonds, and other asset classes), commercial real estate may provide significant benefits, as correlations with stocks and bonds over time have been low.
Regarded as a hard asset, “brick and mortar” real estate may be especially appealing to investors whose confidence in financial assets has been shaken. While the ownership of hard assets may be reassuring, especially during periods of higher inflation, realizing the true value of these assets requires a long-term investment perspective.
You should read the prospectus carefully for a description of the risks associated with an investment in JLL Income Property Trust. Some of these risks include but are not limited to the following:
This literature contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” and other similar terms, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors that may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks, uncertainties, and contingencies include, but are not limited to, the following: our ability to effectively raise capital in our offering; uncertainties relating to changes in general economic and real estate conditions; uncertainties relating to the implementation of our investment strategy; and other risk factors as outlined in our prospectus and periodic reports filed with the Securities and Exchange Commission. Although JLLIPT believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. JLLIPT undertakes no obligation to update any forward-looking statement contained herein to conform the statement to actual results or changes in our expectations.
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