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Green Street: Medium-Term Interest Rates Stall CRE Price Growth
The Green Street Commercial Property Price Index was unchanged in October. The all-property index has increased 3% this year.
“Property appreciation was set to accelerate, but then medium-term interest rates turned higher,” said Peter Rothemund, co-head of strategic research at Newport Beach, CA-based Green Street. “If bond yields stay at current levels, I wouldn’t expect real estate prices to increase much.”
The month-over-month flatness occurred across the board in commercial real estate categories ranging from apartments to self-storage. On a year-over-year basis, individual sectors varied between pricing increases and pricing declines.
Apartment pricing gained 12% Y-O-Y in October, while malls and strip retail experienced smaller annual gains, according to Green Street data. Industrial and healthcare properties were unchanged from the year-ago period, but prices for other sectors declined, with Y-O-Y price drops ranging from – 3% for net lease and manufactured home parks to – 8% for the office and self-storage sectors.
Pictured: Green Street headquarters, 100 Bayview Circle, Newport Beach.
