Hedge Inflation with American Supply Chain Real Estate

Invest in the asset class that has historically outperformed inflation.

Our Track Record

38 Years

Investing in Commercial 
Real Estate

$2.4B

Development Value Generated on Invested Property

22.4%

Average Historical Annual Return

5.3X

Average Historical Equity Multiple

How Private REITs beat Inflation

Inflation is here; What Next?

Consumer Price Index (CPI) and Producer Price Index (PPI), two important indicators of inflation, rose to 9.1% and 11.3% in June 2022, some of the most dramatic yearly increases since the 1980s. As the world continues to recover from the impact of COVID-19, the global economy is experiencing the highest inflation in 40 years.

Investors are seeking to protect their wealth by re-assessing their portfolio’s ratio of stocks, bonds, and private real estate, a greater exposure to commercial real estate will provide an effective hedge to inflation for investors, individual and institutional alike.

5 Ways Real Estate Hedges Against Inflation

Triple-Net Leases (NNN)

Triple-net leases shift the operating costs of a property to the tenants, including real estate taxes, building insurance, utilities, and maintenance costs. So as the price of these inputs rises with inflation, property owners are able to protect their cash flow by passing along the increased costs.

CPI Indexation

Real estate leases may include negotiated annual rent escalations to keep up with inflation by contractually tying rent increases to upward movements in the CPI. This was standard practice in the 70s and 80s during periods of high inflation, and it remains an excellent way to protect investor returns.

Lease Duration

Shorter leases allow property owners to increase rents more frequently to keep pace with rising inflation. Shorter leases protect the real value of cash flows and shareholder returns.

Periodic Rent Reviews

Particularly important for longer-term leases or when only one tenant occupies the property, periodic rent reviews create preset opportunities to adjust rents over the course of a lease.

Long-Term, Fixed-Rate Debt

For properties with loans negotiated during periods of low interest rates, when rents go up, net cash flows increase, all else equal.

CBRE’s data is confirmation of a long-term trend: real estate income has exceeded inflation since at least 1996 (Bureau of Labor Statistics and Green Street Advisors).
This data has led many market watchers to believe that real estate could outperform the broader market in the near term. “Inflation and Real Estate Investments,” a 2017 study published by NAREIT and Wharton, substantiates this claim. A
 portfolio with a 39% allocation to real estate investment trusts (REITs) has a 78% chance of exceeding inflation.

Most publicly traded stocks and bonds have a much harder time keeping pace with general inflation. These investment types — typically lose value as the Consumer Price Index increases. Because hard assets have low correlation with many stocks and bonds, they are capable of adding strong diversification power to a portfolio.

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What Our Clients Say

This is the 14th year my father and I have invested with NOYACK Capital and we are extremely pleased with our returns and how they have exceeded estimates considerably. CJ Follini is always conservative and makes it his mission to beat return estimates by a wide margin. Their network is unparalleled and that’s how we get off market deals at attractive prices. Thank you

Anita Gupta, Gupta Family Office

Gupta Family Office