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Commercial Property Price Indices Approach New Highs, by National Real Estate Investor
According to leading price indices, “commercial property prices are approaching the levels seen during the last boom,” reports Bendix Anderson in a June 20 National Real Estate Investor article. “As prices rise,” he notes, “investors seem torn between pouring more money into the most expensive assets and investing in properties that may have more potential for future appreciation.”
Six of the 23 Moody’s Real Capital Analytics Commercial Property Price Indices “are now higher than their peaks before the crisis,” the article continues, “including apartment buildings in major markets; apartment and office properties in central business districts (CBDs) in major markets; office buildings in CBDs in non-major markets; major markets aggregate and retail in major markets.
Suburban office buildings in non-major markets have experienced the slowest recovery, regaining just over 30 percent of their peak-to-trough loss.”
The article also notes that liquidity in the investment sales market is improving. The average difference between asking prices and sales prices “shrunk by more than 1 percent over the 12-month period that ended in April” and “the average time a for-sale property spends on the market shrank by 3 percent to 417 days” during the same time frame.
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