Office total returns, as well, were heavily weighted toward income, with an average of 1.11% income return and 0.16% appreciation for the sector in Q1. Hotels withstood their fifth consecutive quarter of depreciation for a negative 0.16% total return in Q1 and a 3.34% total return for the trailing year.

In general, though, fundamentals remain resilient for the 7,139 properties included in the Q1 NPI. Occupancy, at 93.0%, was flat over the year, although down 20 basis points from the previous quarter. Industrial has the highest occupancy rate at 95.8%, while multifamily was the only property type to see occupancy gains over the quarter, to 93.5%, although this was down 30 bps year over year.

NOI across the NPI portfolio averaged 5.8% for the trailing year, with industrial once again the lead dog with 6.8% Y-O-Y NOI growth. Apartment and office closely tracked the overall NPI, while retail saw 5.2% NOI growth over the past year.

CHICAGO—Quarterly returns for the National Council of Real Estate Investment Fiduciaries' NCREIF Property Index are staying on trend. Unfortunately, that trend is downward. NCREIF said Tuesday afternoon that the total return for the first quarter of this year was 1.55%, down from 1.73% in Q4 2016 and 2.21% in the same quarter a year ago.

Propelling returns downward has been a steepening curve of depreciation across the $533.8 billion of commercial properties represented in the NPI. Q1's total income return of 1.15% was comparable to the previous quarter's, and NCREIF says the income return has been generally stable over the past three quarters. But the appreciation component of the NPI dropped from 0.59% in Q4 '16 to 0.40% in Q1, continuing a trend of below-1% appreciation.

For the trailing year, the annual NPI total return was 7.27%, consisting of a 4.73% income return and 2.45% appreciation. That's down from the 7.97% total return for the 12 months that ended Dec. 31. For longer-term context, the annualized average total return for the past five years was 10.69% and 6.72% over the past decade.

By property type, industrial remains the best performer, with total returns of 2.83% on a quarterly basis and 12.18% for the trailing 12 months. Retail was the only other property type to outperform the NPI, although by a narrow margin, NCREIF says. With the apartment capital return index value at 8.7% above its prior peak, its 1.30% Q1 return was almost entirely dependent upon income.

Office total returns, as well, were heavily weighted toward income, with an average of 1.11% income return and 0.16% appreciation for the sector in Q1. Hotels withstood their fifth consecutive quarter of depreciation for a negative 0.16% total return in Q1 and a 3.34% total return for the trailing year.

In general, though, fundamentals remain resilient for the 7,139 properties included in the Q1 NPI. Occupancy, at 93.0%, was flat over the year, although down 20 basis points from the previous quarter. Industrial has the highest occupancy rate at 95.8%, while multifamily was the only property type to see occupancy gains over the quarter, to 93.5%, although this was down 30 bps year over year.

NOI across the NPI portfolio averaged 5.8% for the trailing year, with industrial once again the lead dog with 6.8% Y-O-Y NOI growth. Apartment and office closely tracked the overall NPI, while retail saw 5.2% NOI growth over the past year.