RCA Insights

Industrial, Apartment Drive US Price Gains; Retail Sinks

By on December 17th, 2020

The U.S. national rate of commercial property price growth rose in November at the fastest annual clip since the beginning of the pandemic on the back of continued strong industrial and apartment price gains. The US National All-Property Index increased 5.7% from a year ago, the latest RCA CPPI: US summary report shows. In the retail sector meanwhile, the slump in prices deepened.

Industrial prices nearly broke back into a double-digit year-over-year growth range, climbing 9.5% in November. Although deal volume has fallen in the logistics sector this year, there is still an appetite for these properties and that demand has driven price growth in the sector.

Industrial property sales volume for the year through November is down 26% compared with the same period in 2019. That’s the shallowest drop among the major income-producing property types during the pandemic year, as shown in the latest edition of US Capital Trends, also released this week.

RCA CPPI November 2020

Apartment prices posted a 7.6% increase from November last year. Annual returns for the sector have hovered in the mid-7% range over the last few months, with the deceleration seen at the start of the pandemic leveling off.

By contrast, retail prices have sunk further. The retail index dropped 6.7% year-over-year in November, reflecting the cloud of distress that this sector faces. Distressed retail assets represent nearly two-fifths of all outstanding U.S. commercial real estate distress and one-quarter of potential distress, as reported in US Capital Trends.

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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 in the Trends silo of the RCA website.

More pricing and distress articles on RCA Insights:

Today’s Recession Is Brought to You by the Letter K

Distress and Pricing in the US Commercial Property Market

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