National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Trepp: More Properties Selling at a Loss
Commercial property prices declined last year by 5.3%, according to the Trepp Property Price Index, while the rate of properties selling at a loss increased. Prices dropped by 0.82% from the third quarter of 2023 and are now 7% lower than they were at their peak in Q1 of 2022, or roughly where they were in Q3 2021, during the post-lockdown runup.
Trepp noted that pricing declines have slowed as the Federal Reserve had been signaling that it might be done hiking its closely watched federal funds rate and might be ready to start lowering it. In fact, some markets are showing promise, with fewer properties being sold for losses.
Yet overall, 26.4% of paired sales involving office properties represented losses during Q4 2023, compared to 25.3% of losses in Q3 and 21.8% in Q4 of 2022. Meanwhile, 27% of paired retail property sales generated losses in Q4, up from 22.6% in Q3 and 21.5% at the end of 2022.
In contrast, only 12.4% of recorded industrial property sales resulted in losses and 19.8% of multifamily properties did. Both are up from previous periods, though.
- ◦Sale/Acquisition
