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CRE Pricing Ticks Upward in April from Previous Month, Led by Industrial
The pace of decline in U.S. commercial property pricing decelerated in April as improvements in the industrial sector outweighed the ongoing weakness in the office market, reported MSCI Real Assets. The RCA CPPI National All-Property Index fell 2.2% from a year ago and rose 0.1% from March.
MSCI Real Assets noted that some property sectors have performed better than others after adjusting to the new financial conditions brought on by higher interest rates. In particular, prices in the industrial sector have posted continued gains in recent months, while challenges due to tenant demand and depleted deal activity have dragged down the office market.
The industrial index grew at an annualized 6.0%, once again making it the only property sector to post positive annual growth. Industrial prices rose 0.6% in April from March, representing a 12th consecutive monthly gain for this property type.
CBD office prices continued to post the steepest declines of any property sector, falling 33.9% in April from a year ago and 2.3% from March. Suburban office prices fell 7.8% over the past year and rose 0.5% from March.
Pricing for apartments was down 6.9% year-over-year in April and by 0.3% on a monthly basis. The annual pace of decline for apartments has decelerated for eight months in a row, MSCI Real Assets said. The
index was falling at a double-digit rate as recently as November of 2023.
The retail sector index fell 2.6% Y-O-Y. However, the trend has been improving, with the annual rate of decline easing for a ninth month. Relative to March, though, prices dropped nonetheless.
- ◦Sale/Acquisition
