S&P Global Property Index Beats the S&P 500: What CRE Investors Need to Know

TL;DR

Through late June 2025, the S&P Global Property Index posted a one-year return of 14.1%, outpacing both the S&P 500 (11.7%) and S&P World equities (13.8%). Private CRE values bottomed in Q4 2024, confirming the inflection point investors had been waiting for. Redemption queues for open-end core real estate funds have fallen from a $41 billion peak to approximately $25 billion, signaling improving sentiment and reduced selling pressure. Commercial real estate isn't just recovering — it's outperforming.

The Numbers Speak for Themselves

I've been in this industry long enough to know that narrative follows performance. For the past two years, the narrative around commercial real estate has been dominated by rising rates, valuation declines, and institutional pullback. That narrative is now colliding with reality.

The S&P Global Property Index — one of the most widely followed benchmarks for global real estate securities — delivered a 14.1% return over the one-year period through late June 2025. That doesn't just beat bonds or cash. It beats the S&P 500 at 11.7% and the S&P World equities index at 13.8%.

Let me say that again for the people in the back: real estate securities outperformed the stock market over the past year. After years of being told that real estate was "dead money" and that institutional investors should reduce their allocations, the asset class quietly delivered superior returns.

This isn't an anomaly. It's the beginning of a recovery cycle that we've been anticipating at F6 Partners. When values bottom and fundamentals improve, the recovery in real estate tends to be swift and substantial.

The Value Bottom Is Confirmed

The most important data point for private CRE investors is the confirmation that values bottomed in Q4 2024. Multiple indices — including NCREIF, Green Street, and private fund valuations — show that commercial real estate values found their floor in the fourth quarter of 2024 and have been recovering since.

This matters enormously for two reasons. First, it means that assets purchased at or near the bottom are now appreciating. Investors who deployed capital in late 2024 and early 2025 are already sitting on unrealized gains. Second, it provides the valuation certainty that lenders and investors need to transact with confidence. The fear of catching a falling knife has been replaced by the fear of missing the recovery.

For fund managers and sponsors, the value confirmation changes the capital raising conversation entirely. Instead of defending declining valuations, we can now point to concrete evidence that the worst is behind us and the recovery is underway.

Redemption Queues Are Clearing

One of the most closely watched metrics in institutional real estate has been the redemption queue at open-end core real estate funds. At their peak, these queues — investors wanting to pull money out of real estate funds — reached $41 billion. That number has now fallen to approximately $25 billion.

The decline in redemption pressure is significant for several reasons. It means the forced selling that depressed values in 2023 and 2024 is abating. It means investor sentiment toward real estate is improving. And it means fund managers have more flexibility to make acquisitions rather than selling assets to fund redemptions.

The $16 billion reduction in redemption queues represents capital that's staying in real estate rather than exiting. That's a meaningful vote of confidence from institutional investors who, just 18 months ago, were rushing for the exits.

What This Means for CRE Investors

If you've been waiting for a signal that the CRE recovery is real, this is it. The combination of outperformance versus equities, confirmed value bottoms, and declining redemption pressure creates the conditions for a sustained recovery cycle.

At F6 Partners, we see this data as confirmation of our approach. Throughout the valuation downturn, we maintained our focus on sectors with structural demand advantages — student housing, senior housing, and adaptive reuse. These sectors have led the recovery in occupancy and rental growth, and they're now leading the recovery in valuations. Investors comparing REITs versus private real estate for portfolio allocation should note that both public and private vehicles are benefiting from this cycle turn.

For LPs and prospective investors, the message is straightforward: the best risk-adjusted returns in real estate are captured early in the recovery cycle. The data says we're in that window right now. Waiting for more confirmation means paying higher prices for the same assets.

I don't say this to create urgency artificially. I say it because I've lived through three CRE cycles, and the pattern is consistent. The market rewards those who move when the data turns positive, not those who wait until the recovery is fully priced in. For investors seeking diversified exposure across multiple managers, the fund-of-funds strategy most investors don't know exists offers another way to capture early-cycle returns. We're still early in this one, and the opportunity is substantial.