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S&P Updates CRE Indexes

Standard & Poors today updated 10 indexes tracking U.S. commercial real estate prices, breaking down property values by geographic region and industry sector.

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There has been a race of late to get some indexes off the ground to help spur the nascent commercial real estate derivatives industry.

The indexes, maintained and published under agreements between the New York-based credit-rating company and GRA/Charles Schwab Investment Management, include a national composite index and individual indexes for the apartment, office, retail and warehouse sectors. There are also indexes for five geographic regions, including the U.S. Northeast and the Pacific West.

The new indexes "are designed to be a reliable and consistent benchmark for commercial real estate prices in the United States,'' said S&P, a unit of New York-based McGraw-Hill Cos.

The indexes have been calculated back to 1993, tracking the growth of all commercial real estate in the U.S. to its current value of about $5.3 trillion, S&P said. In the 10 years ended in June, annualized returns for the S&P/GRA Commercial Real Estate National Index were 7.4 percent. That's more than the 7.1 percent returns for the S&P 500 Index and the 6 percent returns for the Lehman Aggregate Bond Index.

More information on this index is available here.

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