U.S. commercial property prices moved higher in April, with the RCA CPPI US National All-Property Index rising 1.1% year-over-year, MSCI Real Assets reported. On a monthly basis, prices increased 0.2%, which when annualized would suggest a stronger 2.0% annual price increase.
“Elevated borrowing costs remain a headwind for commercial real estate,” according to MSCI Real Assets. “Previous expectations for Federal Reserve rate cuts have been revised amid accelerating energy inflation due to the Middle East conflict.”
Price growth across property types diverged in April, with CBD office leading the price gains at 4.1% Y-O-Y. The industrial index rose 1.9% from a year ago, marking the eighth consecutive month of slowing annual price growth.
Apartment prices fell 1.1% Y-O-Y in April, extending a pullback that has now taken prices nearly 20% below their July 2022 peak. The retail index fell 2.3% from a year ago, the steepest annual pace of decline of any property type, although the pace of monthly decline lessened for the fifth consecutive month.
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