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NEWPORT BEACH, CA-Property values continue to increase above their 2007 highs. The Green Street Commercial Property Price Index increased by 3% in May.
Property values have not only fully recovered the ground that was lost during the last downturn, but they are also several percentage points above their '07 highs. “Respectable top-line growth has played a role, but the strength in property values has primarily been driven by low rates—that and a healthy financing market,” said Peter Rothemund, an analyst at Green Street Advisors, in a prepared statement. “And despite a recent increase, rates are low enough to expect that the upward trend in values will continue.”
The Green Street CPPI is a time-series of unleveraged US commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted. Features that differentiate this index are its timeliness, its emphasis on high-quality properties and its ability to capture changes in the aggregate value of the commercial-property sector.
As GlobeSt.com reported last month, in April commercial property values were one percentage point above their 2007 highs.
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