The Steady Climb in Property Prices Buoys REIT Valuations

Commercial property prices continued their steady march upwards in February, according to Moody’s/ Real Capital Analytics. Rising occupancy, firming rent growth, increasing transaction activity and still-muted national supply trends are boosting valuations across all property sectors.

The national all-property commercial property price index rose 1.5% in February, to be 15.9% above year-earlier levels (chart). The retail sector, which had lagged earlier in the recovery, posted a robust 2.6% increase, while apartments continued their strong streak with a 1.9% gain. Suburban office is also making up lost ground with a 1.8% rise. CBD office has stumbled in recent months, with a slight decline in February; its strong gains through 2013 and 2014, however, still leave the sector about even with apartments in terms of overall recovery, at 122% and 125% of the December 2007 level.


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The Market Commentary blog on presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership. For more, see our Terms of Use.