According to MSCI Real Assets, commercial property prices in the United States experienced a decline in May at a similar annual rate as seen in April. The RCA CPPI National All-Property Index decreased by 2.3% compared to last year and fell by 0.2% from the previous month.
The monthly report from MSCI Real Assets states that different property sectors have been following varying pricing trends, with those with stronger fundamentals outperforming others due to the current higher interest rate environment.
In May, only the industrial sector saw positive changes both annually and monthly, with an increase of 8.7% compared to last year and 0.9% from April. When annualizing this growth rate using the monthly change data, there is an even steeper rise of 11.l%.
Office properties once again led price declines in May, dropping by16 .9 % on a yearly basis.The decrease for CBD offices was nearly three times greater than that for suburban properties.
Apartment prices also experienced declines of8 .9 % Y-O-Yand1 %fromthe previous month.This would equate to an annualized decline of11 .9 %. Retail also saw decreases at ratesof1 .8 % Y-O-Yand0 .2 %fromApril.
In summary,U.S.commercial real estate prices continued their downward trendinMayaccordingtoMSCIRealAssets.However,differentpropertysectorsperformeddifferentlywithindustrialpropertiesshowingpositivechangeswhileofficeapartmentsandrealestatesawdeclines.Thesedecreasesareattributedtothehigherinterestrateenvironment.Currently,theRCA CPPI National All-Property Index has droppedbya totalof2point3percentcomparedtolastyear,andpointtwopercentcomparedtomonthlyfigures.MSCIREalAssetsexpectsthesetrendscontinuinginthefutureaswell.Accordingtotheirmonthlyreport,themarketwillcontinuetoseevariationsinpricingamongdifferentpropertytypesbasedontheirfundamentals.
