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CRE Pricing Suffers Biggest Annual Drop in 13 Years
U.S. commercial property pricing continued falling in May, MSCI Real Assets reported, with all major property sectors posting steeper annual declines. MSCI’s RCA CPPI National All-Property Index dropped 11.2% from a year ago and 1.2% from April in the largest annual decline for the composite index since May 2010.
“Significant challenges with the cost of financing deals as well as the availability of credit for commercial property investors have weighed on property pricing and deal activity,” according to MSCI Real Assets. As a result, investment volume in the first five months of the year dipped to the lowest level in the past decade.
The apartment sector again posted the largest annual decline, dropping 12.5% year-over-year. Despite the steep drop in apartment prices in recent months, the index remains 19% above the level seen at the start of the pandemic in April 2020.
- ◦Sale/Acquisition
