Report shows how much commercial real estate has fallen

Two exceptions: Apartment buildings, industrial properties are up this year

TRD NATIONAL /
Aug.August 28, 2020 09:30 AM
Commercial real estate indices were down compared with this time last year, but buyers still aren’t selling — yet (iStock)

Commercial real estate indices were down compared with this time last year, but buyers still aren’t selling — yet (iStock)

The economic toll on commercial real estate shows no signs of abating as the health crisis lingers.

Indexes for office, retail and lodging properties were all lower in July than they were a year ago, according to analytics firm Real Capital Analytics, Bloomberg reported. Deals were also down, with transaction volume across all sectors plunging 69 percent to $14 billion.

Hotel prices declined 4.4 percent from the beginning of 2020 through July, while retail fell 2.8 percent and offices fell 0.9 percent, the firm calculated. But there were bright spots: Apartment building prices rose 6.9 percent and industrial values climbed 8.3 percent, contributing to a 1.5 percent increase for all property types during that period.

While many lenders have allowed borrowers to defer mortgage payments, landlords have been reluctant to lower prices and shed assets. That dynamic may change soon as the economic crisis continues and debts mount.

“I wouldn’t be surprised if we start to see some of it start to break in September or October,” said Jim Costello, senior vice president at Real Capital Analytics. [Bloomberg] — Georgia Kromrei


Related Articles

arrow_forward_ios
Courtyard by Marriott in Herald Square and Marriott CEO Arne Sorenson (Google Maps, Getty)

Courtyard by Marriott in Herald Square to close permanently

Courtyard by Marriott in Herald Square to close permanently
From left: Embassy Suites at 60 West 37th Street, Ashford Hospitality Trust CEO Douglas Kessler, Magna Hospitality Group CEO Robert Indeglia and Royalton Hotel at 44 West 44th Street (Ashford, Magna Hospitality, Google Maps)

Royalton, Garment District hotels sell at discounts

Royalton, Garment District hotels sell at discounts
Hilton CEO Christopher Nassetta and the hotel at 234 West 42nd Street (Google Maps; Getty; Hotel Planner)

Hilton Times Square to close permanently

Hilton Times Square to close permanently
From left: Holiday Inn Express at Wall Street, Cindat CEO Greg Peng and Holiday Inn Express at Times Square (Credit: IHG/Booking and Cindat)

Cindat looks to sell stake in Manhattan hotel portfolio at discount

Cindat looks to sell stake in Manhattan hotel portfolio at discount
Thor Equities’ Joseph Sitt and Palmer House Hilton at 17 East Monroe Street (Google Maps)

Joe Sitt’s Thor faces massive foreclosure suit at trophy Chicago property

Joe Sitt’s Thor faces massive foreclosure suit at trophy Chicago property
Foreclosures may be on the horizon for New York City’s hotel market, where there’s nearly $1.5 billion in unpaid CMBS debt. (iStock)

Nearly $1.5B in NYC hotel loans are unpaid

Nearly $1.5B in NYC hotel loans are unpaid
(iStock)

Half empty or half full? Hotel occupancy rate nears 50%

Half empty or half full? Hotel occupancy rate nears 50%
The W Hotel at 8 Albany Street (Google, Facebook)

W Hotel in downtown Manhattan closes forever

W Hotel in downtown Manhattan closes forever
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...