RCA Insights

US CPPI Declines in January, First Drop in Six Years

By on March 8th, 2016

In January, the Moody’s/RCA CPPI recorded the first monthly decline in six years, falling 0.3% for the National All-Property Composite. One month is not a trend, but the slight decline in January follows flat results recorded in December and this is despite volume over this 60-day period reaching a record high. This is the first signal since the recovery from the Global Financial Crisis began that investors may not be willing to push prices higher, at least for now.

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Seven of the 10 building-block indices recorded declines in January, causing price levels to fall by 0.8% for core commercial properties (offices, retail, industrial), while apartment prices rose by 0.7%. Visit the Real Capital Analytics website for full results of the CPPI.

In the next edition of our US Capital Trends we will have additional commentary on these pricing trends, some of the factors causing them and why they may represent the start of the second game in a doubleheader.

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.