By Real Capital Analytics on December 23rd, 2021
U.S. commercial real estate sales and pricing reached record levels in November, driven by the apartment and industrial sectors. Investment volume for the first 11 months of the year has already made 2021 a record year, even without deal activity in December which is normally the busiest month. The headline rate of U.S. price growth also touched a new high.
In both the apartment and industrial sectors, deal volume has already exceeded previous annual highs on the strength of year-to-date activity, as shown in the new edition of US Capital Trends.
The apartment and industrial sectors also posted the fastest annual growth in prices in November, the latest RCA CPPI: US report shows. The apartment index rose 19.2% year-over-year, a record for the sector, eclipsed only by the industrial index which climbed 22.1%, which is the fastest pace for this series. The RCA CPPI US National All-Property Index accelerated to an 18.4% annual growth rate, another record.
Across the other major property types, activity has proved mixed in 2021. For the year so far, sales of suburban offices have surpassed the average pace seen before the pandemic, while CBD offices have lagged, with year-to-date volume just over half that seen pre-pandemic. Suburban office prices climbed 15.1% in November, while CBD office prices rose 3.6%.
Retail prices have rebounded from the losing streak seen for much of 2020 and into 2021. Deal volume in the retail sector for the year so far has been boosted by entity-level deals but still the pace of activity overall is lower than that seen before Covid-19 struck.
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