By Michael Savino on July 22nd, 2021
The headline gauge of U.S. commercial property price growth shifted higher in June, led by the apartment sector. The US National All-Property Index grew 9.8% from a year ago, the fastest annual growth rate since 2015, and 0.8% from May.
Apartment sector price growth, which had dipped as low as 6.9% during 2020, accelerated to 12.0%. Deal activity in this sector has gone beyond the recovery phase and in Q2 2021 was at a record high level for any second quarter period, as shown in the latest edition of US Capital Trends, also released this week.
Industrial property pricing, too, reflects an in-demand sector. The industrial price index rose 9.8% from a year ago, staying in the 9%-10% range seen since the crisis began.
The office sector index rose 6.0% compared to the year prior, the best performance since 2018. Suburban office prices continued to lead the way, posting a 7.7% year-over-year growth rate. CBD office prices continued to decline, falling 2.4% annually.
Retail prices rose 3.2% from a year ago. While this rate is an improvement on the pace seen in recent quarters, it is still below the overall pace of inflation in the U.S. economy.
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