IRVINE, CA—Month-over-month declines in hotel and retail valuations held commercial property's overall pricing increase to 0.8% for September, Ten-X said Friday. Overall valuations for commercial real estate are up 6.7% from the year-ago period, notwithstanding the contraction in lodging and retail.
“The commercial real estate space still shows a healthy upward pricing pattern, though the market has been unable to keep up with the trends we reported in August, when we saw increases across all five property segments,” says Chris Muoio, senior quantitative strategist at Ten-X. “While a moderation in growth from the summer's torrid pace was to be expected, the continued softening of the hotel and retail sectors—which we've been tracking all year—is worth monitoring for investors.”
Earlier this week, Muoio charted the risks facing the hotel sector, including the impact of Airbnb as well as the chilling effects recent events have had on international travel. For September, Ten-X said Friday, hotel pricing contracted by 0.4% after two months of holding steady. It has declined more than 7% over the past year, the only major property type to see a year-over-year decrease in values.
Retail also saw pricing soften compared to August, registering a 0.1% decrease. However, it's up 6.3% from a year ago, although its annual growth rate is the slowest in two years.
Industrial, meanwhile, posted a 1.8% increase for September, marking the sector's second month in a row of healthy growth. Much of the growth may be directly related to retail's decline, given the e-commerce surge that is driving demand for warehouse and distribution center product.
“The divergent trends in retail and industrial show one sector's loss can be another's gain,” says Muoio. “Despite a tepid global trade climate, industrial continues to thrive as consumers continue to turn away from traditional methods of shopping.” His colleague Yan Khamish, who joined Ten-X this past October as managing director of business development, will be among the industry experts speaking at next month's RealShare National Investment & Finance conference, scheduled for Oct. 5 and 6 in New York City.
Apartments, which have been the most consistent of all property sectors, continued their run in September, with 1.4% price appreciation compared to August. Multifamily valuations are now up 12% from a year ago.
For office, although pricing gains were muted in September compared to August—1.2%, with the August Office Nowcast reporting 5.8% increases from the month before—the sector has now reached its all-time peak. Ten-X Research attributes this to solid growth in the labor market, with favorable near-term implications for pricing on office assets.
More than 300 of the industry's leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will join us as we explore the market conditions behind the trends at this year's RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in New York City. Learn more.
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
IRVINE, CA—Month-over-month declines in hotel and retail valuations held commercial property's overall pricing increase to 0.8% for September, Ten-X said Friday. Overall valuations for commercial real estate are up 6.7% from the year-ago period, notwithstanding the contraction in lodging and retail.
“The commercial real estate space still shows a healthy upward pricing pattern, though the market has been unable to keep up with the trends we reported in August, when we saw increases across all five property segments,” says Chris Muoio, senior quantitative strategist at Ten-X. “While a moderation in growth from the summer's torrid pace was to be expected, the continued softening of the hotel and retail sectors—which we've been tracking all year—is worth monitoring for investors.”
Earlier this week, Muoio charted the risks facing the hotel sector, including the impact of Airbnb as well as the chilling effects recent events have had on international travel. For September, Ten-X said Friday, hotel pricing contracted by 0.4% after two months of holding steady. It has declined more than 7% over the past year, the only major property type to see a year-over-year decrease in values.
Retail also saw pricing soften compared to August, registering a 0.1% decrease. However, it's up 6.3% from a year ago, although its annual growth rate is the slowest in two years.
Industrial, meanwhile, posted a 1.8% increase for September, marking the sector's second month in a row of healthy growth. Much of the growth may be directly related to retail's decline, given the e-commerce surge that is driving demand for warehouse and distribution center product.
“The divergent trends in retail and industrial show one sector's loss can be another's gain,” says Muoio. “Despite a tepid global trade climate, industrial continues to thrive as consumers continue to turn away from traditional methods of shopping.” His colleague Yan Khamish, who joined Ten-X this past October as managing director of business development, will be among the industry experts speaking at next month's RealShare National Investment & Finance conference, scheduled for Oct. 5 and 6 in
Apartments, which have been the most consistent of all property sectors, continued their run in September, with 1.4% price appreciation compared to August. Multifamily valuations are now up 12% from a year ago.
For office, although pricing gains were muted in September compared to August—1.2%, with the August Office Nowcast reporting 5.8% increases from the month before—the sector has now reached its all-time peak. Ten-X Research attributes this to solid growth in the labor market, with favorable near-term implications for pricing on office assets.
More than 300 of the industry's leading national investors, REITs, banks, private equity firms, asset management firms and other institutions will join us as we explore the market conditions behind the trends at this year's RealShare National Investment & Finance, scheduled for Oct. 5 and 6 at the Roosevelt Hotel in
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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