U.S. commercial real estate (CRE) prices increased by 7.3% year-over-year in December, according to the latest Real Capital Analytics (RCA) CPPI (Commercial Property Price Indices) report. The U.S. National All-Property Index rose 1.6% in December from a month prior.
The all-types index has gathered strength on the back of robust apartment and industrial sector price increases, says RCA.
The industrial index posted a 0.6% monthly gain in December and was up 8.8% year-overyear. This represents a minor slowdown in the pace of growth from the past few months, but the sector still registered the largest annual increase of any property type.
Annual price gains in the apartment sector reached 8.3%, with 0.9% of that increase coming in December. Multifamily pricing has
been reliably strong throughout 2020, and the change in year-over-year growth from December 2019 was the smallest of all the
sectors, down just 150 bps.
The retail sector has consistently underperformed the other property types and was the only index to post a negative annual return in December. The retail index dropped 4.3% YOY and was essentially flat on the month, down 0.1%.
Office prices saw a slight uptick into year-end, gaining 1.5% from a year ago. Still, this rate marks a petering out of the price growth seen before the pandemic struck.
The spread between prices in the 6 Major Metros and Non-Major Metros was the largest in December in nearly a decade. Prices in the non-major locales climbed to 7.8% annual growth, while the 6 Major Metros index posted a gain of 3.7% YOY.
The 6 Major Metros (6MM) are Boston, Chicago, Los Angeles, New York, San Francisco and Washington DC. Non-Major Metros (NMM) refers to all secondary and tertiary markets.