Definition
What is a Benchmark?
A benchmark in real estate refers to two key concepts:
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Surveyor’s Reference Point: A permanently affixed mark such as a brass marker or metal disk that establishes the exact elevation of a place. Surveyors use benchmarks as reference points in measuring site elevations, creating accurate and reliable surveys. These markers are critical for construction, development, and land measurement purposes.
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Performance Standard: A standard measurement that forms the basis for comparison within the industry. For instance, the Russell-NCREIF Real Estate Performance Report is often used as a benchmark for assessing the performance of institutional real estate investments.
Examples
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Surveyor’s Benchmark:
- The U.S. Coast and Geodetic Survey places brass markers in sidewalks in urban areas to act as benchmarks. These markers note the official elevation above sea level for specific points and are essential for accurate land surveying.
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Performance Benchmark:
- The Russell-NCREIF Real Estate Performance Report, commonly abbreviated as NCREIF, serves as the industry-standard benchmark for evaluating institutional real estate performance. Financial performance of large real estate portfolios is often compared against this report.
Frequently Asked Questions (FAQs)
What is the role of benchmarks in real estate surveying?
Benchmarks provide fixed reference points to ensure accurate elevation measurements during surveying. They serve as the backbone for precise land and property assessments, influencing project planning and development accuracy.
How are benchmarks used in measuring real estate performance?
Benchmarks like the Russell-NCREIF Real Estate Performance Report provide a standard for comparing the financial returns on real estate investments. They help investors gauge performance against a widely accepted standard, ensuring that performance assessments are objective and meaningful.
Who maintains benchmarks in the U.S.?
In the United States, benchmarks are typically maintained by government agencies such as the U.S. Geological Survey (USGS) and the National Geodetic Survey (NGS).
How often are benchmarks in real estate performance updated?
Performance benchmarks like the Russell-NCREIF Real Estate Performance Report are updated quarterly, providing timely and relevant data to investors and analysts.
Are benchmarks used internationally?
Yes, benchmarks are used globally. Different countries have their own versions of benchmarks for measuring both land elevations and real estate performance.
Related Terms
Surveying:
The process of determining the terrestrial or three-dimensional positions of points and the distances and angles between them.
Elevation:
The height of a point relative to sea level or ground level, crucial for land surveying and construction.
NCREIF:
The National Council of Real Estate Investment Fiduciaries, an association that produces the Russell-NCREIF Property Index serving as a performance benchmark.
Real Estate Performance Report:
A document that aggregates data on the performance of real estate investments, helping investors benchmark their performance against industry standards.
Institutional Real Estate:
Refers to large-scale commercial properties held by institutional investors such as pension funds, insurance companies, and mutual funds.
Online Resources
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National Geodetic Survey (NGS):
- NGS Official Website Provides resources related to benchmarking and geodetic surveys.
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U.S. Geological Survey (USGS):
- USGS Official Website Offers data and tools for topographic, geologic, and hydrologic benchmarks.
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Russell-NCREIF Performance Report:
- NCREIF Official Website Insight on benchmarks for real estate investment performance.
References
- U.S. Coast and Geodetic Survey. “Benchmarks and Permanent Monuments”. U.S. Department of Commerce.
- Russell-NCREIF. “Real Estate Performance Report”. NCREIF.
- Surveying Manual. “Elevation and Benchmarks”. National Surveying Society, 2023.
Suggested Books for Further Studies
- “Surveying” by Bannister and Raymond: Comprehensive guide to the principles and practices of land surveying.
- “Principles of Real Estate Management” by John J. Schueneman: Insights into real estate investment and performance measurement.
- “Geodetic Benchmarks: The Gold Standard for Accurate Land Surveying” by Matthew Bennett: Analysis of benchmarks in geodetic surveying.
- “Real Estate Finance and Investments” by William Brueggeman and Jeffrey Fisher: Detailed coverage of real estate investment performance and benchmarks.
