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NEWPORT BEACH, CA-Green Street Advisors Inc. reports that its commercial property price index shows that property pricing has remained unchanged since May of this year. The index 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.
In May, a large increase in interest rates put the brakes on what had been a long-running recovery in property values. “Property values are inversely correlated with interest rates, so it's no surprise that the rally in prices faltered when interest rates spiked,” says Peter Rothemund, an analyst with Green Street Advisors. “And though no one can predict which way rates are headed, the fact that they've moved lower over the past several weeks opens the door for further property appreciation.”
As GlobeSt.com reported in October, the Green Street Commercial Property Price Index was unchanged in September. Property pricing continues to drift sideways as the sharp increase in interest rates that occurred earlier this year has put a brake on the four-year-long recovery in property values.
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