Private Real Estate Valuation and Sale Price Comparison 2022
Research Paper
August 2, 2023
Preview
For most asset classes, investment performance is measured using transaction prices. But real estate is known to be an illiquid and heterogeneous asset class, so valuations and transaction prices may differ significantly at the level of individual assets.
In the latest installment of our annual report, "Private Real Estate: Valuation and Sale Price Comparison 2022," we look at two measures of representativeness for property indexes: weighted-average absolute difference (WAAD), which is the absolute difference between a property's sales price and valuation, and weighted-average difference (WAD), which measures the amount a property's sales price is above or below its valuation.
Global sales-to-valuation relationship, 2000 to 2022
Source: MSCI Global Annual Property Index
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