Commercial Real Estate – Rising Prices and Strong Demand in the Second Quarter

Posted August 10, 2011

In California, Columbus, Commercial, investing, Los Angeles, Ohio

Investors showed a sharpened appetite for commercial property, pushing prices up in the second quarter.

I realize that the second quarter, the end of June, sounds so long ago given what’s happened in the last month or so with the debt debate (debacle) and S&P downgrade knocking the wind out of our sails and sales.

Ok, back to the results. CoStars News reports that sub-indices, 26 out of 31, showed increases second quarter 2011. The national composite index increased 6.1% reversing a 6% decline in the first quarter. However, the Investment Grade Index posted a 11.9% increase for the second quarter, while the general grade index increased 4.9% balancing the previous quarter’s 4.4% decline.

The National All Property Type Composite Index rose 2.2% from May to June. The index still remains 33% below the peak. The investment Grade Index rose 3.1% month over month.

Office saw the biggest increase with 17.4% over first quarter. The 10 largest markets rose 20.1% so recovery is taking faster in core versus secondary and tertiary markets.

Industrial and multifamily also did very well posting a 10.4% gain versus first quarter. Retail was flat at a .2% drop.

Among US regions, the South edged out the Midwest with a 12.6% gain versus 12.4% in the Midwest. The west saw a 5.4% rise and the Northeast a 5.3% decline.

For more detail, I’ll turn it over to Randyl Drummer with CoStar News

CoStar News – Rising Prices Signal Gains in Commercial Real-Estate Demand Up at Mid Year Before Latest Market Jolts

Commercial realtor

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