Healthy economic growth combined with steady demand and favorable interest rates provided a backdrop for continued growth in CRE pricing through the final quarter and the full year of 2017, according to the latest release of CoStar Commercial Repeat Sale Indices (CCRSI) data.
The equal-weighted U.S. Composite Index extended its streak of stronger growth with a 14.7 percent increase for 2017 and a 0.7 percent gain for the fourth quarter as the scope of the pricing recovery broadened across the full size and quality spectrum of the nation’s commercial real estate market – including Philly office space, Philly retail space and Philly industrial space. The value-weighted U.S. Composite Index rose 5.7 percent and 0.8 percent, respectively, during the same periods.
This CoStar report on the national pricing trends in the commercial real estate market is being offered through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.
All the major commercial property-type indices in the U.S. and Philadelphia commercial real estate markets, including land and hospitality, posted gains in 2017 and ended the year on a positive note, marking the sixth consecutive year of pricing recovery.
Reflecting the healthy appetite for logistics properties rate among national and Philadelphia commercial real estate listings, the Industrial index increased 17.7 percent, well ahead of the 9.9 percent pace set over the previous two years as industrial vacancy hit the lowest point of the cycle in 2017 despite a record year for new logistics construction.
The Prime Multifamily Metros Index also increased by a slower 4.2 percent in 2017, suggesting weaker growth in higher-value apartment properties in primary markets. Rising deliveries and already-elevated pricing contributed to a slower rate of multifamily price growth last year in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space. While a slowing from the prior period in 2015 and 2016, the overall U.S. Multifamily index rose by a still-robust 8.5 percent in 2017.
The rate of growth decelerated in the prime market indices and in some property segments among U.S. and Philadelphia commercial real estate listings ticking and the prime markets indices within each property sector dominated by the larger core coastal metros, generally advanced more slowly than the broader property-type indices in 2017, reflecting heightened growth at the lower end of the market.
Despite a high-profile wave of store closures and retailer bankruptcies that have pressured comparable-store sales, the U.S. Retail Index posted a 10 percent gain over the year. Store chains targeting less-productive locations for closure as demand for stronger locations remained robust. For more information about Philly office space, Philly retail space and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (firstname.lastname@example.org) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.
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