US CRE prices continue to grow in April, says RCA

U.S. commercial real estate (CRE) prices increased by 6.5% YOY.

US commercial real estate (CRE) prices increased by 6.5% YOY, not far off the 6.7% gain seen this time last year, according to the latest Real Capital Analytics RCA CPPI (Commercial Property Price Indices) report. The US National All-Property Index grew 0.5% in April from March.

The Covid-19 upheaval has pounded the U.S real estate market, with deal volume tumbling 71% YOY in April, said in the report. ‘Social distancing measures and travel restrictions have made it difficult to perform the necessary due diligence to close on a property, and many deals that were already in contract fell through.’

Price growth across most property types decelerated slightly in April, but for many this was a continuation of a trend that began before the pandemic. The industrial index rose 0.6% from March and 8.3% YOY, down from the 12% gains posted last summer. Office price gains also slowed, up just 0.2% from March and 4.0% YOY.

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Retail prices increased into April, gaining 0.9% over the past three months and 3.1% from last year. The sector has been one of the hardest hit due to the widespread shuttering of stores and restaurants, and multiple national retailers filing for bankruptcy, but impacts from these closures have not yet flowed through to pricing as owners are not yet forced to sell.