Pricing Continues its Downfall into October

Source: Ten-X

U.S. commercial real estate prices are flat according to the Ten-X Commercial Real Estate Nowcast, as aggregate pricing held constant in October from a month ago, but declined on a year-over-year basis for a third straight month. All five major property segments were listless yet again in October, showing only minor changes from a month ago as the late-cycle plateau persists.

The Ten-X Industrial Nowcast fared the best among the five major segments in October, posting gains of 0.2 percent from September and 0.4 percent from a year ago. Regional results were mixed; prices declined in the West and Southwest while rising in other regions.

Ten-X Office Nowcast pricing was up 0.1 percent from a month ago, led by healthy gains in the Southwest, but declined 0.8 percent year-over-year.

The Ten-X Retail Nowcast saw the largest monthly decline with a 0.2 percent drop from September’s index level. Declines in the Northeast and West pulled down growth in the other U.S. regions. Retail pricing also fell 0.3 percent from a year ago, the second straight month of annual decline on the heels of continuous growth dating back to 2011.

Ten-X Apartment Nowcast pricing fell by 0.1 percent from a month ago, with only the Southeast region showing significant gains. Annual growth measured 1.3 percent and was positive for a 12^th straight month, though the annual pace has slowed from earlier in 2019.

The Ten-X Hotel Nowcast has now posted annual pricing declines in 19 of the last 21 months and saw the sharpest year-over-year decline among the five major segments with a 1.6 percent drop. Prices lifted 0.1 percent from a month ago, buoyed by gains in the West and Southwest regions, but the long-term downtrend remains in place.

Peter Muoio is the chief economist at Ten-X.