RCA Insights

Suburban Office Leads US Price Gains in May

By on June 21st, 2018

U.S. commercial real estate prices rose in May, led by soaring monthly gains in the suburban office sector, the latest RCA CPPI summary report shows. Suburban office prices grew 1.7% from a month earlier, helping the US National All-Property Index to a 0.6% monthly gain.

Price growth in suburban offices has accelerated over the past seven months and the sector posted an annual price increase of 8.5% in May, ahead of the all-property index which rose 7.9%.

1806 US CPPI_sectors_legend

CBD office properties posted another month of declines, with prices down 0.3% for May. This places the sector in negative territory on an annual basis, down 0.3% year-over-year. Retail prices continue to move sideways, posting zero monthly growth for May.

Industrial prices were the second-fastest growing in May on a monthly basis, climbing 0.9%. Apartment prices rose 0.8% from a month earlier and are up 11.5% from a year prior, the fastest annual growth among the property types.

The pricing gains in the industrial and apartment sectors are reflected in the deal activity for the year to date, as shown in the new edition of US Capital Trends, also released this week. While industrial deal activity took a pause in May it is still up nearly 20% for the year-to-date compared with the first five months of 2017. Apartment deal activity jumped in May, and for the year-to-date is up 10% compared with the same period in 2017.

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 reports and conduct your own pricing analysis on the RCA website.