RCA Insights

US National Prices Creep Higher in August, Retail Slides

By on September 24th, 2020

U.S. commercial property prices posted a 1.6% year-over-year gain in August as declines in retail and office pricing weighed against continued growth in industrial and apartment prices, the latest RCA CPPI summary report shows. The US National All-Property Index was rising at close to a 6% rate at the start of 2020, before the Covid-19 crisis hit the economy.

Retail prices sank in August, posting a 4.1% year-over-year drop. Prices for the beleaguered sector started declining in April and have accelerated each month since then. Overall office prices were dragged down by a 1.4% annual decline in suburban office prices.

Prices for the industrial sector — still seen as an investor favorite despite a continuing slump in transaction volume — rose 7.4% from a year prior. Apartments also posted a 7.4% year-over-year gain.

Debt markets are supporting commercial real estate pricing, as noted in the new edition of US Capital Trends, also released this week. More capital flowed into refinancing activity than acquisition activity in the first half of 2020. The ability of owners to refinance properties rather than sell has led to sticky prices.

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To learn more about the RCA CPPI (Commercial Property Price Indices) and to sign up for reports visit rcanalytics.com. If you are an RCA client you can access RCA CPPI and US Capital Trends reports and conduct your own pricing analysis on the RCA website.

Also on RCA Insights:

Low Interest Rates Not Enough to Kindle CRE Sales Activity

The US Debt Stool, Though Wobbly, Is Still Standing

Owner Expectations Need to Change for Prices to Fall

Wyatt Avery

Wyatt Avery joined Real Capital Analytics in 2016. He is a senior analyst in New York, specializing in cross-border capital flows and the RCA CPPI. He is a leader on several US-focused publications.