Commercial Property Prices Slip at Slower Rate in January

(Illustration courtesy of Real Capital Analytics/MSCI)

Real Capital Analytics, New York, reported the annual rate of decline in U.S. commercial property prices slowed in early 2024.

The RCA CPPI National All-Property Index fell 0.1% in January from December and 4.7% from a year ago. Prices had been falling at an annual pace approaching 11% last summer.

“Talk in recent months about potential rate easing by the Federal Reserve appears to have impacted property pricing,” the report said. It noted apartment property prices dropped 7.9% from a year earlier in January compared to a nearly 14.1% annual rate last August.

Suburban office prices slid 0.4% from December and have fallen 11.9% over the last year. Central business district office property prices posted the most significant declines of any property sector, falling more than 28% from a year ago.

The industrial sector actually posted positive annual growth in January, rising 1.4% from a year earlier, RCA reported. Industrial prices have posted month-over-month increases since last June.

“Retail was the only other property sector to post positive month-over-month growth in prices, rising 0.1% in January,” the report said. “Retail prices fell 3.6% from a year earlier, but the trend has been improving, with the rate of decline moderating for a sixth consecutive month.”