US commercial property prices rise 6.7% y-o-y in September

US commercial property prices rise 6.7% y-o-y in September

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.

”There is wide variance in price trends across the property types,”said in the RCA CPPI summary report.

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.