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TheStreet Open House

Latest CoStar Commercial Repeat Sale Analysis: CRE Pricing Leaps Forward In August Boosted By Strong Net Absorption In First Half Of Year

Stocks in this article: CSGP

WASHINGTON, Oct. 10, 2012 (GLOBE NEWSWIRE) -- This month's CoStar Commercial Repeat Sale Indices (CCRSI) provide the market's first look at August 2012 commercial real estate pricing. Based on 878 repeat sales in August 2012 and more than 100,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

October 2012 CCRSI National Results Highlights

PRICE RECOVERY ACCELERATES ACROSS THE BOARD: The two broadest measures of aggregate pricing for commercial properties within the CCRSI — the U.S. Value-Weighted Composite Index and the U.S. Equal-Weighted Composite Index — each posted significant gains in August 2012. The two components of the equal-weighted U.S. Composite Index (Investment Grade and General Commercial) both advanced in August, signifying that the recovery in property pricing has reached across all size and quality dimensions of the commercial real estate sector.

VALUE-WEIGHTED INDEX REACHES HIGHEST MARK IN 3+ YEARS: The U.S. Value-Weighted Composite Index, which weights each repeat-sale by transaction size or value and therefore is heavily influenced by larger transactions, reached its highest level since early 2009. It has now improved by a cumulative 34.1% since the start of 2010, reflecting strong investor demand for primary gateway metro areas and institutional-grade multifamily assets that have been at the forefront of the pricing recovery for commercial property.

EQUAL-WEIGHTED INDEX POSTS BIGGEST GAIN IN SIX YEARS: The rate of improvement in the U.S. Equal-Weighted Composite Index, which weights each repeat-sale equally and therefore reflects the influence of the more numerous smaller transactions, has accelerated. The 7.6% year-over–year increase of the Equal-Weighted Composite Index in August 2012 was the largest such gain since August 2006. Despite the increase, cumulative gains in the Equal-Weighted Index have lagged behind those in the Value-Weighted Index, reflecting a slower rate of recovery of tenant demand in the General Commercial segment.  

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