Retail Joins The Pack As Prices Rise Across All CRE Sectors
Prices for commercial property assets continued increasing in April, with all property types — office, industrial, retail and multifamily — registering a year-over-year increase for the first time since before the coronavirus pandemic, Real Capital Analytics reports.
In April, RCA's National All-Property Index grew 8.4% compared with April 2020 and 0.9% compared with March 2021.
Even the long-suffering retail index was up. Prices for retail gained 1.3% compared with a year ago and 0.5% for the month. Annual price growth for retail assets was flat in March 2021 and had dropped each month before that for nearly a year, according to RCA.
Unsurprisingly, industrial assets enjoyed the largest spikes in prices for the year in April, up 9.4%. Compared with last month, industrial prices gained 0.8%. Apartment prices grew nearly as much: 7.6% for the year, 0.7% for the month.
Though the prices for office assets were up overall — 0.3% month-over-month and 3% year-over-year — suburban office properties drove the increases. In the suburbs, prices were up 0.4% for the month and 4.4% for the year, but central business district office asset prices dropped 0.4% for the month and 4.9% for the year.
RCA reported stronger increases in secondary and tertiary markets compared with the nation's major metros, which the company defines as Boston, Chicago, Los Angeles, New York, San Francisco and Washington, D.C.
In April, prices for all property types were up in the major metros by 0.3% month-over-month and 2.7% year-over-year. In secondary and tertiary markets considered as a whole, prices increased 1% for the month and 10.1% for the year, pointing to heightened investor interest outside major metros during the pandemic.
RCA bases its price indices on repeat-sales transactions through the month of its most recent report. The company periodically makes backward revisions to its indices as new data becomes available, and its future indices reflect those adjustments.
