Supported by record levels of absorption and strong leasing, U.S. commercial real estate prices, which locally includes Philadelphia commercial real estate prices, rebounded in May, with continued strong recovery in both higher-end U.S commercial property and accelerating investor interest in smaller, lower-priced assets, according to the latest CoStar Commercial Repeat Sale Indices.
The value-weighted U.S. Composite Index – which includes Philadelphia office space, Philadelphia retail space and Philadelphia industrial space – along with the equal-weighted U.S. Composite Index gained 1.4% and 1.7%, respectively, in May, according to the data based on 1,258 repeat sales in May and more than 140,000 repeat sales since 1996.
The value-weighted index of both U.S. and Philadelphia commercial real estate listings advanced 12.2% in the trailing 12 months through May and now stands 12% above its prior peak, reflecting the strong recovery of larger, higher-value properties. The equal-weighted index began its recovery later in the cycle but has increased at a faster rate of 14.1% in the trailing 12 months through May 2015 as smaller properties, such as Philadelphia commercial properties, continued to gain favor with investors.
The momentum shift to lower-quality and smaller tracts of U.S. commercial property – which encompasses Philadelphia office space, Philadelphia retail space and Philadelphia industrial space – also is mirrored by the recent growth of the general commercial segment within CCRSI’s equal-weighted index. The General Commercial Index rose by the fastest rate among the four major CRE price indices, 14.6%, for the 12 months through May, while the Investment Grade Index increased 11.9%.
Robust leasing activity in both nationwide and Philadelphia commercial real estate listings is driving price appreciation across more markets and property types. For the 12 months ended at mid-year 2015, net absorption in office, retail, and industrial properties – as well as both U.S. and Philadelphia commercial properties – totaled 575.5 million square feet — a 39.3% increase over the same period in 2014 and the highest annual total since 2008.
Net absorption in the general U.S. commercial property segment rose 37% over the 12-month period through second-quarter 2015. Meanwhile, net absorption in the investment grade segment remained just as strong, increasing by nearly 40% over the 12 months as commercial tenants continued their flight to higher quality space.
For more information about Philadelphia office space, Philadelphia Industrial Space, Philadelphia retail space or other Philadelphia commercial or investment properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) or Leor Hemo(leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker that specializes in Philadelphia office space.
Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.
Wolf Commercial Real Estate, a Philadelphia commercial real estate broker with extensive expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space or new Philadelphia retail space with the Philadelphia commercial properties that best meets their needs. As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals. If you are looking for Philadelphia office space or Philadelphia retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.
