Inflation now at 6.2%… big firm says inflation helps cre returns

[Jim Stein]

Prices rose 6.2% annually in October. As an investor this is extremely concerning. 

I’m reading an article with expert analysis about inflation and what it means for commercial real estate. The author talks about some research done by Berkadia where they found inflation HELPS apartment returns. What surprised me was that the stock market and reits were on the other side of the spectrum. 

Looking more into that Berkadia report I also learned that I’m not even considering risk adjusted returns… at all. I’m familiar with the Sharpe ratio but I’m not with the “Sortino” ratio. Apparently it helps you determine how good your market does in compensating you for “bad volatility.” Anyway, the report opened my eyes to a lot of different things I’m NOT doing that I SHOULD be doing as a real estate investor. 

Anyway, the article and Berkadia report are great reads. I’d be interested to hear all your thoughts about this.