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
Sam Chang and 140 West 28th Street (Gene Kaufman Architects)

Sam Chang sells hotel in Chelsea for $147M

Sam Chang sells hotel in Chelsea for $147M
Investors worry that New York City’s battered commercial real estate sector is indicative of larger issues nationwide with hotels, restaurants and retail. (iStock)

New York’s CRE woes could spread nationwide: investors

New York’s CRE woes could spread nationwide: investors
Magna CEO Robert Indeglia with the Courtyard by Marriott 307 West 37th Street and the Fairfield Inn & Suites at 325 West 33rd Street (Google; Magna)

Magna Hospitality emerges as New York’s hotel vulture

Magna Hospitality emerges as New York’s hotel vulture
Ashkenazy Acquisition's Ben Ashkenazy and Marriott East Side at 525 Lexington Avenue (Google Maps)

Lawsuit accuses Marriott of misappropriating funds at East Side hotel

Lawsuit accuses Marriott of misappropriating funds at East Side hotel
Ian Schrager and the Pulic Hotel at 215 Chrystie Street (Getty; Google)

$60M mezz loan on Ian Schrager’s Public Hotel is for sale

$60M mezz loan on Ian Schrager’s Public Hotel is for sale
The Martinique hotel (Wikipedia, Google Maps)

Operator of Martinique Hotel in Manhattan files for bankruptcy

Operator of Martinique Hotel in Manhattan files for bankruptcy
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
arrow_forward_ios

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

Loading...