U.S. commercial property prices increased by 6.7 percent year-over-year in September, according to the latest Real Capital Analytics CPPI (Commercial Property Price Indices) summary report. The US National All-Property Index rose 0.7% in September from August, maintaining the monthly pace of growth seen since May.
Apartment growth ticked up to an 0.8% monthly pace and quickened to a 7.7% annual rate, arresting the slowdown in price growth seen since early 2018.
The industrial index posted the largest annual gain across the property types again, up 11.9% YOY. Monthly price increases have slowed, however. Prices rose 0.3% from August, down from the 1.0%+ gains seen earlier this year.
Price growth for both office and retail properties has weakened significantly compared with the rates posted a year earlier. The office index gained 3.1% YOY, compared to a 7.0% clip in September 2018.
Retail continues to lag the other property types. Prices rose only 1.4% YOY, down from the 2.8% annual return a year ago.
The 6 Major Metros and Non-Major Metros have seen a swap in trends over the last year. Annual price growth in the Major Metros accelerated to a 7.4% pace in September, the fastest rate since early 2018. Prices for the Non-Major Metros meanwhile held at a 6.2% YOY increase.
”With uncertainty about the economic outlook growing, investors have favored larger cities with higher levels of liquidity,” said in the report.
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.