RCA Reports U.S. Commercial Property Prices Remain Firm
New research by Real Capital Analytics (RCA) reveals U.S. commercial real estate price growth of 0.7% increase in the past month and a 7.2% increase over the past year. RCA economists point out, however, the numbers of closed deals in the month do not yet reflect the COVID-19 health crisis that has all but shut down the U.S.
RCA’s US National All-Property Index showed apartment property price growth was the fastest of the sectors for the second consecutive month, with growth outpacing the industrial sector. Apartment prices jumped 11% from a year ago, and gained 1% on the month.
Industrial prices had posted the fastest growth rate for more than a year, but in recent months the clip has eased, notes RCA. The index increased 0.6% from February and 8.9% YOY. Industrial sector prices were increasing at a 12.5% annual rate as recently as July.
Prices in the office market climbed 5.7% YOY, more than double the rate of growth seen just seven months ago. Suburban assets drove these gains, as they recorded 5.8% annual growth. Price increases in CBD areas slowed to 3.1% YOY.
Retail prices edged higher, gaining 0.3% from February and 2.8% YOY, says RCA. Annual growth in this sector has been sluggish over the past few years, hovering around a mid-2% rate.
In the six major metros RCA tracks, price growth slowed to 5.8% YOY. Price gains in the non-major metros quickened to 7.3% YOY. RCA predicts price recovery will emerge as sellers adjust their expectations to those of buyers amid the economic and financial upheaval.
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