IRR-Based Property-Level Performance Attribution.

The article provides a new approach to conducting property-level performance attribution for the management of directly held real estate investment assets in the U.S. as of 2003. In the past decade, investment performance attribution has become more widely used along with the rise of style-based investment management and the development of benchmark indexes that represent style-pure investment performance. Performance attribution is designed to help understand the determinants of the historical performance of investment managers during given periods of time. As a money-weighted return, the internal rate of return is more appropriate for investment performance measurement due to its sensitivity to the effect of cash flow timing.