Commercial property prices continued to rise across all property types in most markets in January, according to a new report from the CoStar Group.
The latest CoStar Commercial Repeat Sale Indices (CCRSI) said the two broadest measures of aggregate pricing for commercial properties within the CCRSI — the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index — both rose by 1.2% in January, achieving year-over-year gains of more than 12% in each index.
Bolstered by steady gains in recent months, CoStar said the value-weighted index’s January increase brought the index to a record high. The research company said the value-weighted index — which reflects prices paid in repeat sales of large, high-quality commercial properties, including those for Philadelphia office space and Philadelphia retail space — is now 7.5% above its 2007 pre-recession peak, primarily as the result of investors driving up prices as they compete for high-end properties.
Meanwhile, CoStar said the equal-weighted composite index maintained its a year-long trend of monthly growth in January, but is still 13.4% below its 2007 pre-recession peak, primarily because its recovery began later in the cycle. The equal-weighted composite index is influenced by smaller properties as yield-seeking investors direct their capital into secondary markets and property types because of soaring prices in the top core markets, CoStar noted.
Investment sales started the year on a positive note with composite sale-pair volume of $108 billion the twelve months ending in January 2015, an increase of 30% over the prior 12-month period, CoStar said. The company noted that the 12-month tally of $108 billion did not include June 2014’s $4.4 billion foreclosure sale of Stuyvesant Town-Peter Cooper Village apartments in New York City.
CoStar also noted increases in investor interest for commercial property, including those for Philadelphia office space and Philadelphia retail space. CoStar said repeat sale volume in the general commercial segment was up 28.2% in January from a year ago, nearly as robust as the 30.7% gain in the investment grade category.
The CoStar report also said that the alignment of buyer and seller price expectations in January stood at its highest level since summer 2008. The ratio comparing the actual sale price to the asking price for properties sold in January 2015 stood at 91.2%, contracting 2.4 percentage points over twelve months ending January 2015, CoStar said. It was one of several indications of increased investment liquidity for commercial property, such as Philly office space and Philly retail space.
In addition, the average time properties for sale sat on the market declined by 6.6% while the percentage of properties take off the market by discouraged sellers, dropped by 4.6 points to 35.2% in January from a year before, CoStar noted. Distress sales were down as well, the research company said, dropping to 9.3% of observed sale pair counts for the year ending January 2015 from 16.2% the year prior.
For more information about Philadelphia office space, Philadelphia retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak to Jason Wolf (215-588-8800-cell; jason.wolf@wolfcre.com), Leor Hemo (215-514-1750-cell; leor.hemo@wolfcre.com) or Lee Fein (215-206-5580-cell; lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space and Philly retail 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 expertise in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philadelphia office space or Philadelphia retail space with the Philadelphia commercial properties that best meets their needs. As experts in Philadelphia commercial real estate listings, 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 Philly office space or Philly 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.
Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.
