RCA Insights

US Commercial Property Price Growth Wanes in July

By on August 23rd, 2018

Annual growth in U.S. commercial property prices lost steam for the fourth consecutive month in July, the latest RCA CPPI summary report shows. The US National All-Property Index rose 7.0% year-over-year in July, almost half the pace of price growth shown in early 2015. Prices rose 0.7% in July from June.

Price gains across property types continue to diverge. Apartments posted the highest monthly and annual increases in July. Apartment sector prices rose 12.0% from a year ago, driven by growth in secondary and tertiary markets.

CBD office prices gained just 1.3% from a year earlier in July, the weakest price increase among the property types, and retail prices grew 1.8%. In July the U.S. consumer price index rose 2.9% year-over-year so, accounting for inflation, owners of CBD offices and retail properties are losing ground.

1808 US CPPI_sectors

More muted price growth may be kindling CBD office sales. Transaction volume in the office sector increased by more than 30% year-over-year in July, the new edition of US Capital Trends shows, bolstered by single asset sales in the CBD office market. Deal volume across all major property types dipped 4% in July from a year earlier, but for the first seven months of 2018 volume is greater than the same period in 2017, the report shows.

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.