CoStar CRE Sale Index Shows Improvement in June, Second Quarter of 2011

The CoStar Group reported a definite improvement in the investment sales climate for commercial real estate properties in June. CoStar's National Composite Index, part of its Commercial Repeat Sale Index (CCRSI), rose 2.2 percent for the month, compared to a 1.5 percent drop recorded during the same period a year earlier. CoStar's National Investment Grade Index rose 3.1 percent, about half of the growth recorded a year earlier with 6.8 percent. And the company's General Index, encompasssing all commercial properties, rose 1.9 percent. Last June, CoStar recorded a 3.3 percent decline in the General Index.

The gains reported in June were in line with the strong figures reported for the entire second quarter of 2011. During the quarter, the CCRSI showed increases in 26 out of 31 total pricing sub-indices. The National Composite Index rose 6.1 percent, after a 6.0 percent decline in the first three months of the year. The Investment Grade Index rose 11.9 percent, also an improvement over the 12.6 percent decline reported in the first quarter. And the General Commercial Grade Index rose 4.7 percent, after a previous drop of 4.4 percent.

What's more, transaction activity during the quarter increased to 2,690 sales pairs, compared to 2,176 sales pairs during the first quarter. Transaction activity on investment grade properties in particular rose 33 percent between the first and second quarters of this year.

The one bit of bad news emerging from CoStar's second quarter figures was that pricing on retail properties dropped about 0.2 percent compared to the first quarter at a time when pricing on office, industrial and multifamily properties went up anywhere from 9.5 percent to 17.4 percent.

CoStar previously reported an increase in investment sales volume for retail properties in May.

The methodology for tracking CCRSI can be found here.

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