US property prices rise 15.9% year-over-year in October

US commercial property prices rise 15.9% year-over-year in October

U.S property prices rose 15.9% year-over-year in October, according to the latest Real Capital Analytics (RCA) CPPI (Commercial Property Price Indices) report.

The RCA CPPI National All-Property Index rose 1.7% from September.

RCA said this is the fastest rate of price growth seen in the history of the RCA CPPI as intense investor demand for commercial properties continued.

The office index increased 13.7% YOY in October, a fourth consecutive month of double-digit growth. Suburban office prices continued to drive gains, increasing 15.6% YOY. The CBD office index rose 0.9% YOY, an improvement from the declines seen for most of 2021.

The apartment and industrial sectors both posted annual price gains higher than the office index in October. Industrial prices rose 18.9% from a year ago and 1.9% from September, the fastest annual and monthly rates among the major property sectors.

The apartment index climbed 16.8% from a year ago, the fastest rate in the history of the RCA CPPI for this sector. Prices rose 1.4% from September. For the year so far, investors have bought more than $200 billion worth of apartment assets, almost twice the activity seen at this point in 2020.

Retail sector prices posted significant annual gains of 14.2%, the third consecutive month of double-digit price growth and the highest rate since before the Global Financial Crisis.

The spread between the 6 Major Metros and Non-Major Metros widened again in October. Prices in the Non-Major Metros gained 17.6% from a year ago, versus a 10.6% increase in the Major Metros.

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.