U.S. commercial real estate(CRE) prices maintained a steady pace of growth in February, with the US National All-Property Index increasing 0.6% over the month and 6.7% YOY, according to the latest Real Capital Analytics CPPI (Commercial Property Price Indices) summary report.
These gains correspond with increasing deal volume in January and February, before COVID-19 rattled the U.S. market, said in the report.
The apartment index took the top spot in February, overtaking industrial growth for the first time since 2018. Multifamily prices increased 0.9% from January and 10.4% over the last year.
Industrial prices gained 9.9% annually, the first dip below double-digit price growth in more than a year. While the sector posted the highest volume of the property types in February, this was mainly due to one large M&A deal.
Retail price growth remained unchanged in February, up 2.4% YOY. This sector has steadily posted growth in the mid-2% range for much of the last two years, but the economic impact of the COVID-19 outbreak may put even that small growth rate in jeopardy in the future.
The office index increased 0.8% in February from January and 5.8% from a year prior. CBD prices led this growth, up 5.9% YOY, and suburban office prices gained 5.0% YOY.
The spread between price growth in the Major and Non-Major Metros widened this month. Just a few months ago, both indices were rising at the same clip.
In February, prices in the Non-Major Metros rose 6.5%, while growth in the 6 Major Metros slowed to 5.7%.
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