RCA Insights

US Retail, Office Prices Drop as Apartment, Industrial Gain

By on October 22nd, 2020

The annual rate of U.S. commercial real estate price growth came in at 1.4% in September, as continued gains in apartment and industrial sector prices balanced out declines in retail and office prices, the latest RCA CPPI: US summary report shows. The US National All-Property Index gained 0.2% in September from August.

Retail prices dropped 0.7% from August and sank 5.3% from September 2019. This sector, along with hotels, has been pummeled during the ongoing health crisis and may have even more trouble ahead as commercial property loan distress widens.

line graph comparing property price change across sectors

The office sector index was little changed on the month but declined 1.5% year-over-year. The pandemic has interrupted demand for office space, with future trends still uncertain. Sales of office properties declined 60% in the third quarter versus a year prior, as shown in the latest edition of US Capital Trends, also released this week.

Apartment prices gained 0.6% in September from August and rose 6.7% year-over-year. The multifamily price index has slowed from the double-digit pace seen earlier this year, but deal activity has fared better during the pandemic than most of the other property sectors. The industrial sector has been the most stable of the property type prices indices over the last several months, posting in the mid-7% annual growth range.

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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.

Also on RCA Insights:

US Commercial Real Estate Sales Tumble Again in Q3

Institutional Investors Finding Opportunities in the Downturn

Owner Expectations Need to Change for Prices to Fall

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.