U.S. Commercial Property Prices Continue to Rise

U.S. Commercial Property Prices Continue to Rise

Commercial property prices showed another increase in May, according to the most recent report from ratings firm Moody’s and research firm Real Capital Analytics (RCA).

The Moody’s/RCA Commercial Property Price Indices (CPPI) all-property composite rose 1.3 percent during the month. For the three-month period between February and May, the all-property composite rose 4.5 percent.

Office properties in Central Business Districts (CBDs) experienced the most significant price increase in May, at 3.6 percent, and the greatest increase over a three-month period, at 12.1 percent. This was followed by prices on office properties overall, with a 2.0 percent increase in May, and prices on apartment buildings, with a 1.3 percent increase.

The smallest price jump during the month was experienced by suburban office buildings, at 0.2 percent. Industrial properties registered a 0.5 percent price increase and retail properties a 0.3 percent increase.

Prices for all core commercial properties rose by 1.2 percent and are now 5.4 percent above their previous market peak, according to Moody’s. Prices on office buildings in CBDs are now a whopping 42 percent above their previous peak.

The Moody’s/RCA CPPI is based on repeat sales taking place two calendar months prior to the publication of the report.

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