MSCI: Commercial Property Prices Rise in June

(Illustration courtesy MSCI)

Commercial property prices broke from their pattern of declines in June after a year and a half of losses, according to MSCI, Inc., New York.

The MSCI RCA CPPI National All-Property Index rose 0.6% in June. All sectors except for multifamily posted improved annual trends.

The industrial sector once again performed best, with prices up 8.0% from a year ago and up nearly 50% from the start of the pandemic. “Investors have increasingly favored assets with strong fundamentals during the turbulent macroeconomic environment of the past four years,” the report said.

The office sector continued to register the largest annual declines of the property sectors, MSCI reported. Central business district office prices fell 24.7% in June from a year ago, while suburban office prices dropped 7.5%. “[But,] those declines were still an improvement on the magnitude of decreases seen over the past 12 months,” MSCI added.

Apartment prices fell 7.5% year-over-year in June, while retail property prices rose 0.7% from a year ago, marking the first month of annual growth for the index since December 2022 and a recovery from the high single-digit declines seen just a year ago. The retail index rose 0.5% in June from May.

Prices in both the six largest metro markets in the United States–New York, Los Angeles, Chicago, Dallas, Houston and metropolitan Washington, D.C.–and non-major metros improved at the same quarter-over-quarter rate in June: 0.5%. The major-market index was weaker over the past year, MSCI reported.