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RCA CPPI Shows Price Declines Continuing to Subside
Commercial property prices declined once again in November from the prior year, as the RCA CPPI National All-Property Index declined 0.5%, MSCI Real Assets reported. However, prices are faring better compared to a year ago, when the index posted a 7.4% YOY decline. The index has posted six monthly increases in a row, and in November prices rose 0.3%.
“Over the course of the market downturn, elevated borrowing costs have been a major driver of price weakness,” according to MSCI Real Assets. “However, other factors such as changing tenant preferences
have also played significant roles. As such, the declines across most sectors have varied, as each grapples with its own challenges.”
In November, the rate of annual price declines for both suburban and CBD office properties eased, with suburban offices falling 0.8% and CBD offices by 12.3%. CBD prices showed a 0.4% monthly gain, indicating a 5.2% annualized increase. CBD office prices have declined 50% from their March 2022 peak, while suburban office prices are down 16%.
Industrial property prices have been the most resilient during the downturn and in November reached a new high, logging a 4.7% annual gain, MSCI Real Assets reported. The firm cited strong demand from e-commerce and supply chain shifts.
Apartment pricing has fallen 20% since its peak in July of 2022 and dropped 5.7% year-over-year in November. On a month-over-month basis, prices fell 0.3%.
Retail property prices posted an annual gain for the first time in two years in November, ticking up 0.7%. The index rose 0.5% from October, which when annualized would indicate a stronger increase of 6.6%.
- ◦Sale/Acquisition
