The U.S. commercial real estate market is large and growing, and until the launch of CBOT^® Dow Jones U.S. Real Estate Index^SM futures, it represented one of the largest classes of tradable assets that had not been served by the futures markets.  CBOT Dow Jones U.S. Real Estate (DJUSRE) Index futures fill this role by enabling market participants to trade commercial real estate asset exposure through a futures contract that is transparently priced and traded on a regulated derivatives exchange.

DJUSRE Index futures are based on the Dow Jones U.S. Real Estate Index, a widely followed index based, in turn, largely upon prices of real estate investment trusts (REITs).

REIT prices are particularly good proxies for market valuations of U.S. commercial property (e.g., hotels, office buildings, industrial sites, shopping centers, and apartment complexes).  Since 1960, REITs have been afforded special status under the Internal Revenue Code (Title 26, Section 856).  One consequence is that REITs pay little or no Federal income tax but must distribute nearly all their income to their shareholders.  For this reason, REIT price dynamics directly and clearly mirror changing trends in leasing rates for commercial property, as well as movements in commercial real estate valuations arising from, for example, vacancies, development costs, and property transaction values.

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 - DJUSRE Reference Guide - 04.04.2007