US commercial property price growth accelerates further in September

US commercial property price growth accelerates further in September

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.