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Latest CoStar Commercial Repeat-Sale Analysis: Real Estate Prices Sustain Recovery With Strong Showing In July

Stocks in this article: CSGP

WASHINGTON, Sept. 12, 2012 (GLOBE NEWSWIRE) -- This month's CoStar Commercial Repeat Sale Indices (CCRSI) provide the market's first look at July 2012 commercial real estate pricing. Based on 741 repeat sales in July and more than 100,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

September 2012 CCRSI National Results Highlights

  • COMMERCIAL PROPERTY PRICES NOTCH BIG YEAR-OVER-YEAR GAINS: Reflecting continued improvement in property market fundamentals, the two broadest measures of aggregate pricing for commercial properties within the CCRSI—the Equal-Weighted U.S. Composite Index and the Value-Weighted U.S. Composite Index—both posted substantial gains in July 2012. The Equal-Weighted Composite Index increased by 5.9% in July 2012 compared to one year earlier. Overall pricing reflected in this index is now up a cumulative 6.3% from the trough in March 2011. The Value-Weighted Composite Index found that U.S. commercial real estate prices surged by 11.3% over the same one-year period.  
  • VALUE-WEIGHTED INDEX REMAINS ROBUST: Strong growth in the Value-Weighted Composite Index indicates the highest-priced properties at the top end of the market continue to lead the recovery in commercial real estate pricing. This index has now increased 33% from the market trough in January 2010, but remains 18.4% below its peak in September 2007.  
  • GENERAL COMMERCIAL PROPERTY SECTOR CATCHING UP: While the investment-grade market segment has been responsible for the bulk of pricing gains to date, pricing in the broader market dominated by smaller, less expensive properties has made significant strides in recent months. The Equal-Weighted General Commercial Index increased by 1.6% in July 2012 and has accumulated a 3.9% gain since the beginning of 2012. At the same time, pricing in the Equal-Weighted Investment Grade Index held its own, rising 2.1% in July 2012, and increasing 5.2% from one year earlier despite the volatility seen in pricing of this segment early in the year.  
  • TIME-ON-MARKET CONTINUES TO DECLINE: Coinciding with the positive overall price movement evident in the CCRSI, sellers of commercial properties appear to be finding a more accommodating market in 2012. The average time on market for sold properties decreased by almost 2% since the end of the first quarter in 2012. Similarly, the gap between initial asking and final sales price narrowed by more than 2.5% since the beginning of 2012. Also, the decline in the number of properties withdrawn from the sales market by prospective sellers is another indication of improving investor sentiment.  In July 2012, the number of properties withdrawn from the market declined 11.4% since the same period last year.  
  • DISTRESS LEVELS CONTINUE TO ABATE: Only 16% of observed trades in July were distressed, 20.6% lower than the peak level observed in March 2011.

Several charts accompanying this release are available at http://media.globenewswire.com/cache/9473/file/15580.pdf

About the CoStar Commercial Repeat-Sale Indices

The CoStar Commercial Repeat-Sale Indices (CCRSI) are the most comprehensive and accurate measures of commercial real estate prices in the United States. In addition to the national Composite Index (presented in both equal-weighted and value-weighted versions), national Investment Grade Index and national General Commercial Index, which we report monthly, we report quarterly on 30 sub-indices in the CoStar index family. The sub-indices include breakdowns by property sector (office, industrial, retail, multifamily, hospitality and land), by region of the country (Northeast, South, Midwest, West), by transaction size and quality (general commercial, investment grade), and by market size (composite index of the prime market areas in the country).

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