RCA Insights

US Price Growth Slows to Eight-Year Low in January

By on February 28th, 2019

Growth in U.S. commercial property prices slowed to the weakest annual pace in eight years in January, the latest RCA CPPI summary report shows. The US National All-Property index rose 5.8% from a year earlier and 0.3% from December.

1902 US CPPI_national_1

Apartment sector price growth remains the strongest among the sectors at an 8.8% annual pace of increase. However, the sector does not escape the waning trend and this was the lowest increase since 2013. Apartment price growth had hovered around 12% for most of the first half of 2018.

Commercial property acquisitions dropped 31% in January from a year earlier, as shown in the new edition of US Capital Trends, also released this week. Rather than a warning of future calamity, investors are likely pausing to take stock of the financial market turmoil seen late in 2018. Cap rates were little changed in the month.

The one property type that kept the damage limited in terms of single property sales was the industrial sector. The sector also posted steady annual price growth of 7.6% and out of all property types had the strongest monthly price growth at 0.6%.

The CBD office and retail sectors showed moderate annual price growth in January. Special attention goes to the suburban office sector which posted solid growth rates for most of 2018, but has struggled since October. This sector posted a three-month decline of 0.4% in January.

Real Capital Analytics publishes a monthly report on U.S. national price trends and a quarterly report on global price trends. Sign up to receive RCA CPPI: US and RCA CPPI: Global Cities by visiting rcanalytics.com

If you are an RCA customer you can access RCA CPPI reports and conduct your own pricing analysis on the client-only RCA website.