CRE Price Indexes Reach New Heights in Latest Readings

Article originally posted on on January 20, 2016

The latest readings are out for the Moody’s/RCA, Green Street and CoStar commercial real estate price indices. All three showed prices increasing for the time period they measured.

Here are some takeaways from each organization’s most recent report.

  • The Green Street Commercial Property Price Index was unchanged in December. Property prices have increased by 10 percent over the past year and by 30 percent over the past three years.
  • The Moody’s/RCA Commercial Property Price Indices national all-property composite index increased 1.4 percent. The national all-property composite index increased by 14.7 percent year-over-year, extending its streak of double-digit annualized gains to 34 months.
  • Moody’s also noted that central business district (CBD) office prices are up by 26 percent over the last 12 months, outpacing the next best performing sector, retail, by more than 10 percentage points.
  • CoStar, meanwhile, reported that its value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index each increased by 0.9 percent in November 2015, contributing to annual gains of 12.2 percent and 11.7 percent, respectively, for the 12 months ended November 2015.
  • CoStar added that the value-weighted U.S. Composite Index is now 18.4 percent above its 2007 prior peak. The equal-weighted U.S. Composite Index, which reflects pricing for smaller properties in second-tier locations, also posted solid growth but remained 4 percent below its prior peak.