Smaller Deals Lead the Way in Pricing Gains

WASHINGTON, DC—They may not grab headlines with as much ferocity as trophy assets, but investment sales outside the core markets are leading the way in some key metrics. That’s one of the conclusions to be taken from this month’s CoStar Commercial Repeat Sale Indices, released Wednesday.

Specifically, Washington, DC-based CoStar says that within its equal-weighted US Composite Index, the “general commercial” segment, comprised mainly of smaller deals typically found in secondary and tertiary markets, made its strongest annual pricing gain since the recovery began. It increased by 17.2% over the 12 months that ended March 31, a gain that CoStar attributes to continued investor interest in non-prime markets. During the same time period, the “investment grade” segment increased by 14.9%.