RCA Insights

Chart: US Sector Momentum at Midyear 2019

By on August 19th, 2019

When deal volume is climbing in a market, one might expect to see stronger growth in property prices. This relationship did not hold into Q2’19 in the U.S., however, with no uniform trend across property sectors or geographies.

Deal volume in the CBD office sector, for instance, grew at a 23% YOY pace in the 6 Major Metros. With that growth, the RCA CPPI for CBD offices in these areas was up 6.7% YOY. For CBD offices in the Non-Major Metros, however, volume was up only 13% YOY but prices were up 7.5% YOY.

Price growth is at record highs in the CBD office markets of the major metros so it is hard to push them further, but a number of big deals did close and boost volume in the quarter.

 

1908 US sector mom COTW MAIN-01-01

This article is an excerpt from the Q2 2019 edition of US Capital Trends. If you are a Real Capital Analytics client, log into the RCA website to download The Big Picture report and reports for the five major property types. The next edition of US Capital Trends will be published August 21. 

To learn more about RCA’s data and publications, contact us.

Jim Costello

Jim Costello

Senior Vice President
jcostello@rcanalytics.com

Jim Costello has worked in the CRE space on issues of urban economics since 1990, including a 20-year stint at Torto Wheaton Research. Jim expanded the reach of the Torto Wheaton Research team developing forecasts of global market fundamentals. He also developed approaches to pair the forecast results with frameworks to answer investor questions on asset values and relative investment opportunities.

In the aftermath of the Global Financial Crisis, Jim provided advice to the Treasury Department and helped educate these professionals on commercial real estate performance. Jim is a member of the Commercial Board of Governors of the Mortgage Bankers Administration, where he helps policy makers understand the commercial real estate industry.

Jim is expanding the capabilities of the Real Capital Analytics team on issues of real estate market dynamics. Jim has a master’s degree in economics and is a member of the Counselors of Real Estate.