August 16, 2019
Two California markets claimed spots among the top four on Real Capital Analytics’ (RCA) global price growth rankings. North America posted the strongest price growth in Q2 2019, with the composite index for the region gaining 6% year-over-year in Q2 2019 and up 1.4% for the quarter. Global price growth slowed to 4.4% in Q2.
San Francisco led the rankings by a wide margin, with commercial property prices up 14.6% year-over-year in Q2 2019. Though expensive, investors still are finding tech sector-driven opportunities in San Francisco.
RCA wrote in the report, “San Francisco stands out a mile as the best performing market over the last 12 months. The tech sector continues to act as magnet for capital, despite the fact prices are nearly three times higher than their low point in 2010.”
Los Angeles fell in behind Amsterdam and Boston, at No. 4 on the list, reporting price growth of 10% year-over-year in Q2 2019.
Commercial property prices fell on a quarterly basis in nine out of the 18 metros that make up the RCA Global Cities Index. RCA points out some markets may reverse course in the coming quarter, though the fact that so many metros posted declines is a warning sign. The last time 10 markets posted declines in prices was in 2010, in the aftermath of the Global Financial Crisis, notes RCA.
Price growth in the NYC Metro slowed to a pace of only 1.5% year-over-year growth. RCA says commercial prices in Manhattan have dragged down the metro area, as prices in the city have fallen 2.9% year-over-year. The D.C. Metro trailed the pack, one of only three global cities posting negative annual growth this quarter, down 4.8%, with 1.9% of that decline experienced this quarter.
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