U.S. commercial property prices increased by 8.7 percent year-over-year in November, according to the latest Real Capital Analytics CPPI (Commercial Property Price Indices) summary report. The US National All-Property Index increased 1.0% in November from October.
The all types index, as well as multiple property type indices, showed the strongest gains of the year in November, said in the report.
The industrial sector has posted strong returns throughout 2019, but last month saw the highest increase so far – up 13.6% over the past year and 1.2% from October.
Retail was the biggest surprise in November, gaining 3.4% from a year prior. While the retail index still saw the lowest annual increase of all the property types, this level of growth is high compared to the steady 2.0% range it has posted over the last two years.
The office index has picked up speed after a dip in returns during the middle of the year. The sector was up 1.0% from October and 5.7% from a year ago. CBD prices posted a 6.7% YOY increase. The suburban index, which was responsible for the midyear decline in the office index, has bounced back: up 4.6% this month.
The apartment index also posted its highest increase of the year in November, gaining 9.3% YOY. The property type is down from the double-digit gains of 2018, but it has been the one sector to consistently outperform the all types index over the last two years.
Prices in the 6 Major Metros grew 7.4% YOY and in the Non-Major Metros prices climbed 8.8%. These two indices registered about the same rates of return last quarter, but the non-major index has since pulled ahead.
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