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CRE Prices Continue Dropping, but Rate of Decline Slows
Commercial real estate prices dropped again in November from the year-ago period, although the rate of decline continued to shrink, MSCI Real Assets said Thursday. The RCA CPPI National All-Property Index dropped 8.0% from a year ago, representing a narrowing of the annual declines seen at midyear. Compared to October, prices were flat, an improvement on the month-over-month drops of nearly 2% at the start of 2023.
Property prices have slipped over the past year along with sales volume, which in November dropped 60% year-over-year, as reported in the latest edition of US Capital Trends. The industrial index was the sole property type to post either monthly or annual gains. Industrial prices dipped at midyear but rebounded to positive annual growth in October and November. Prices in that sector rose 1.8% in November Y-O-Y.
The office index posted the largest decline of any property type, falling 14.9% YOY. “Uncertainty around the future need for office space, as well as the shock of higher mortgage rates, has driven a decline in both sales volume and prices,” according to MSCI Real Assets.
Apartment prices have dropped 12.1% over the past year. However, the rate of annual decline has slowed over the past few months, with the index declining 0.7% since October. In November, the retail index dropped 0.3% from October and 6.7% from a year earlier. Prices in the sector began declining at the start of 2023 after reaching record levels in 2022.
- ◦Sale/Acquisition
