In December 2023, the Green Street Commercial Property Price Index remained steady, ending the year with a 10% decrease. The index measures pricing for high-quality commercial real estate and is currently 22% lower than its peak in March of 2022.
According to Peter Rothemund, co-head of strategic research at Green Street, it appears that the correction in real estate pricing has reached its conclusion. He states that commercial real estate is now priced fairly compared to corporate bond yields and this sentiment is reflected in market prices for listed REITs.
Office properties have experienced the largest declines both on a year-over-year basis and when compared to their peak in March of ’22 with drops of 25% and 35%, respectively. Malls were the only property type to see a slight increase in pricing over the past year; however they are still down by 20% from their peak. Lodging has fared relatively well compared to other sectors since its peak while also experiencing one of the smaller declines on a yearly basis.
