According to the latest report from MSCI Real Assets, U.S. commercial property prices have finally halted their downward trend in June after experiencing losses for the past 18 months. The RCA CPPI National All Property Index remained steady compared to last year and saw a slight increase of 0.6% from May. While all sectors showed improved annual trends in June, apartments were the only exception.
Industrial properties continued to be the top-performing type with an 8% increase in prices compared to last year and almost a 50% rise since before the pandemic began. This can be attributed to investors’ preference for assets with strong fundamentals during these uncertain times, while other types of properties faced their own challenges.
The office sector still recorded significant declines on an annual basis but showed some improvement over the past year’s performance. CBD office prices dropped by 24/7%, while suburban offices saw a decrease of only 7/5%.
Apartment prices also experienced declines both annually (by -7/5%) and monthly (by -0/5%). Despite improvements seen across other major property sectors over the past quarter, apartments continue to struggle with around a yearly decline rate of -7/5%.
On a positive note, retail property prices rose by 0/7% compared to last year – marking its first month of growth since December2022 – and showing recovery from high single-digit decreases seen previously as well as another small increase (+0 /05%) from May’s numbers.MSCI Real Assets noted that when looking at this monthly change on an annualized basis,the retail index actually shows even stronger growth at +6 /1%.
