Prices of US Commercial Property Tumbled in January
Prices of U.S. commercial property fell in January at an annual pace of decline not seen since late 2010, after the global financial crisis. The RCA CPPI National All-Property Index dropped 4.8% from a year ago and 2.7% from December. The monthly drop, when annualized, would be a decline of 27.9%.
A spike in mortgage costs in 2022 has thwarted deal activity in commercial property, pushing pricing lower. Purchases of U.S. commercial real estate totaled less than USD 20 billion in January, and it was the fifth-weakest start to a year since 2005.
Apartment tumbled
Apartment prices tumbled, posting the largest declines of any property segment on the year and on the month. The apartment index dropped 4.6% from a year earlier and fell 2.8% in January from December.
The industrial index was the only sector to post annual growth in January. Industrial prices rose 6.4% from a year earlier. In retail, prices dropped 0.1% versus a year ago.
Prices of suburban offices fell 0.5% from a year earlier and 1.1% from December, marking the fifth consecutive month of negative monthly returns. The index for offices in central business districts fell 0.9% from a year ago.
Annual change in US commercial-property pricing
Source: RCA CPPI (commercial-property price indexes)
UK Real Estate Returns Slid as Capital Growth Tumbled
Quarterly total returns for U.K. property fell to -11.9% in December 2022, the lowest level since 2008, according to the MSCI UK Quarterly Property Index.
2023 Trends to Watch in Real Assets
Five critical insights to help you navigate challenges ahead.
Is Inflation Here to Stay?
Growth in the consumer price index (CPI) has moderated, and some investors seem hopeful that inflation worries are in the rearview mirror.
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.