U.S commercial property prices rose 7.0% y-o-y in January and gained 0.5% on the month, in line with recent increases, according to the latest Real Capital Analytics CPPI (Commercial Property Price Indices) summary report.
Industrial and apartment property prices led the growth, said in the report. The industrial index rose 0.6% in January from December and increased 10.7% from a year ago. The annual growth rate, while still the strongest among the property types, has been gradually slowing since mid-2019.
Apartment prices, on the other hand, have picked up steam since the middle of last year. The index grew 9.7% YOY and 0.5% from December.
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The office sector has also seen a recent uptick in prices, gaining 0.8% in January from December and 5.6% YOY. While the sector is still underperforming the AllProperty Index, this annual rate of growth is nearly double the rate posted just six months ago. This increase is being driven by accelerating price gains in both CBD and suburban geographies.
The retail index again came in as the slowest growing property type. Retail prices were flat on the month and posted a 2.4% gain over the last year. This has been a consistent pace for the index, which has posted an average 2.3% annual return rate over the last three years.
Price increases in the 6 Major Metros slowed to 5.8% YOY and Non-Major Metro price gains quickened to 7.2% YOY. A year ago the trends were the opposite, with prices in the major metros accelerating, and prices in non-major geographies slipping.
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
