RCA Insights

US Price Growth Quickens to 7.8% in December: RCA CPPI

By on January 23rd, 2020

U.S. commercial property prices increased 7.8% in December from a year earlier, closing out 2019 with a sixth consecutive month of accelerating growth, the latest RCA CPPI summary report shows. The U.S. National All-Property Index rose 0.7% in December from a month prior.

Price growth quickened in 2019 as the U.S. commercial real estate market posted one of the most active years on record. Total annual deal volume across the property types slipped just 2% from 2018’s all-time high, held back by a lack of entity-level deals.

Industrial prices soared throughout 2019, with the sector posting the largest gains among the property types each month. In December, industrial prices rose 12.1% from a year prior.

The apartment index gained 9.6%, nearly back to the double-digit gains seen in 2018. The multifamily sector logged the strongest price growth in the past decade, climbing a cumulative 163%, far ahead of any other property type.

Office prices had a lackluster 2019, decelerating in the first half of the year. However, the index has been gathering pace again in the last few months, increasing 4.1% in December from a year ago.

Retail price growth accelerated into the end of the year, rising 3.8% YOY. While weaker than that of the other key property types, this growth is stronger than the sub-2.0% clip seen two years earlier. The 2010s were a tough decade for retail prices, which gained a cumulative 49%, or roughly half of what the All-Property Index gained.

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.

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.