NEWPORT BEACH, CA—The property-price index needle continued its slow and steady upward climb last month. According to Green Street Advisors Inc., the Green Street Commercial Property Price Index increased by about .5% in June, showing that property appreciation has gained momentum over the past few months and values are now at or above 2007 highs in nearly every major property sector.
Peter Rothemund, an analyst at Green Street Advisors, says, “Cap rates are starting to move lower again. They’re down 10 to 20 bps over the last three months, and consequently, property values are higher. That pattern—lower cap rates and higher values—is likely to continue. Interest rates that are near historic lows will push property values higher.”
As GlobeSt.com reported in June, Green Street Advisors’ CPPI increased by 2% in May, in contrast to the more lackluster price appreciation seen earlier this year. Values at the end of May were up 4% year-to-date, 5% year over year and 10% since the August 2007 peak, according to Green Street data.