U.S commercial property prices increased 7.8% year-over-year in December, closing out 2019 with a sixth consecutive month of accelerating growth, according to the latest Real Capital Analytics CPPI (Commercial Property Price Indices) summary report. The U.S. National All-Property Index rose 0.7% in December from a month prior.
Industrial prices soared throughout the year, with the sector posting the largest gains among the property types for 12 months in a row, said in the report. In December, industrial prices rose 12.1% YOY and 0.8% from November.
While industrial prices have had a good run over the last few years, the multifamily sector had the strongest price growth this decade. Apartment sector prices increased a cumulative 163%, far ahead of any other property type. For 2019, the apartment index gained 9.6%, nearly back to the double-digit gains seen in 2018.
Office prices had a lackluster 2019, decelerating in the first half of the year. However, the index has been gathering pace again in the last few months, increasing 0.5% in December from November and 4.1% from a year ago.
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Retail prices increased into the end of the year, up 0.4% from November and 3.8% YOY. Retail has been the slowest growing sector for a few years now, but this level of growth is stronger than the sub-2.0% clip seen two years ago. The 2010s were a tough decade for retail prices, which gained a cumulative 49%, or roughly half of what the All-Property index gained.
Non-Major Metro prices continued to outperform the Major Metros index. Prices in the major locales rose 5.9% in 2019 and in non-major locations 8.3%.
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.