June 4, 2018
Commercial real estate pricing rose 0.2% in May, according to Ten-X Commercial’s May Commercial Real Estate Nowcast. That is the index’s fourth consecutive monthly gain.
Despite the slight uptick, the Ten-X CRE Nowcast posted a 1% decline compared to May 2017, which is the second consecutive month the index has experienced a year-over-year drop. Previous to this April and May, the index posted continuous year-over-year growth since its inception in January 2011.
Ten-X Chief Economist Peter Muoio says, “Pricing declines during the second half of 2017 were partially due to rising interest rates, and as rate increases have slowed in recent months, the Nowcast has begun to edge up again. However, even with four consecutive monthly increases, the fact that pricing stands lower than a year ago is strong indication that investor sentiment is soft and undecided.”
Key sector findings:
– Apartments posted the biggest increase, rising 0.8% in May, as robust growth in the Southwest buoyed the sector, though all other regions except the West also saw pricing increases
– Office posted its third consecutive monthly gain, rising 0.2% in May to bring the year-over-year increase to 0.7%
– Retail remains the most consistent of all sectors; its 0.2% gain in May marked the 11th increase in the past 12 months, and is now 4.8% higher than a year ago
– Industrial increased for the second time in seven months, although only climbing a meager 0.2% in May
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