February 6, 2020 Comments Off on Lower Mall Values Dent CRE Pricing in January Views: 530 National News

Lower Mall Values Dent CRE Pricing in January

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The Green Street Commercial Property Price Index declined by 0.5% in January from the previous month, said Green Street Advisors. The decrease in the index, which measures pricing of a broad swath of U.S. commercial properties, was driven by lower mall values. Pricing of most other property types was unchanged from December 2019.

“Supported by low interest rates, prices of most property types have been steady or rising,” said Peter Rothemund, managing director at Green Street. “The exception has been malls. A secular shift away from department stores and other mall retailers has caused many investors to red-line the space, and best-guess estimates put prices as much as 30% below the levels of three years ago.”

On a year-over-year basis, mall pricing retreated by 15% in January. Commercial property pricing generally increased by 2% during that time, led by manufactured home parks with 16% Y-O-Y gains and industrial with 13%.

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