US commercial property values slipped slightly in March: report

Cap rates continue to flatten while transaction activity slips, according to Green Street Advisors

TRD New York /
Apr.April 07, 2016 02:40 PM

Citing a continuing slowdown in both transaction volume and value appreciation, Green Street Advisors’ national index of U.S. commercial property values fell slightly in March to the tune of less than one-half percent, the real estate research and advisory firm said Wednesday.

As in previous reports, Green Street noted that capitalization rates “have flattened out over the past few months,” corresponding with property appreciation having “slowed materially from the pace of last year” and a related decline in transaction activity.

Though the current commercial real estate cycle has seen property values eclipse their pre-recession peak in 2007, according to Green Street, the slight decline in the national property index feeds into previous forecasts that the cycle may reach its conclusion in 2016.

But despite indicators playing into that narrative, Green Street senior analyst Peter Rothemund said that property values at large “appear to be holding their ground” thanks to financial and securities markets that have stabilized.

“Though that seemed an unlikely proposition a month or two ago, the rally in the financial markets and the return of some normalcy to the [commercial mortgage-backed securities] market have helped property pricing,” Rothemund said.

Green Street’s Commercial Property Price Index remained up 8 percent year-on-year in March and 23 percent above its previous peak in August 2007.


Related Articles

arrow_forward_ios
As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

250th Issue

The Real Deal celebrates 250 issues

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

Neir’s Tavern (Credit: Google Maps)

City’s oldest bar, of “Goodfellas” fame, gets last-minute lifeline

Neir's Tavern (Credit: Google Maps)

Landlord to bar owner: You don’t have to go home but you can’t stay here

729 Seventh Avenue (Credit: Google Maps)

Lawyer argued façade was safe 3 months before fatal accident

Bill Ackman, LeBron James, and Arnold Schwarzenegger with 787 11th Avenue (Credit: Google Maps and Getty Images)

Celebrity property group caught in $11M construction dispute

Renderings of The William Vale and Denizen Bushwick (Credit: iStock)

All Year’s rating outlook turns negative as bondholders reject two amendments

arrow_forward_ios
Loading...