U.S commercial property price growth accelerated further in September, according to the latest Real Capital Analytics (RCA) CPPI (Commercial Property Price Indices) report.
The RCA CPPI National All-Property Index rose 16.1% from a year ago and 2.2% from August.
Most major property sectors are contributing to this momentum on price growth, though some stand out from the others, says RCA.
The office sector index accelerated to a 16.9% YOY rate in September, overtaking apartment and on par with the industrial sector.
Suburban office prices powered the gain, climbing 20.2% YOY. CBD office prices continued to fall in September, though at -1.2% this was the shallowest rate of year-over-year decline seen in 2021 so far.
Apartment prices posted a 16.3% pace of growth, the fastest rate seen since RCA began coverage in 2000. Apartment deal volume has totaled $178.5b through the first three quarters of 2021, which would be a near-record level of activity for a full year.
Industrial prices rose 16.9% YOY, also the fastest rate since the year 2000 and the eighth straight month of double-digit annual price growth. Heightened investor demand for industrial assets fueled record levels in both price growth and deal volume in the third quarter.
The retail index jumped 12.4% from a year ago, the second consecutive month of double-digit price growth. This is a sharp turnaround from earlier in the year — the index had been declining as recently as February.
Prices in the 6 Major Metros climbed to a 13.2% YOY rate of growth, extending the rally seen since late last year. Prices in the Non-Major Metros outpaced the 6 Major Metros, rising 16.1% YOY.
Note: 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.