CRE News You Need To Know – March 8, 2016

Commercial real estate prices slipped for the first time since 2010 in the U.S. The Moody’s/RCA Commercial Property Price Index declined 0.3% in January 2016, the rating agency reported in a statement about the findings. The decline is the first since the CPPI troughed in early 2010, and follows a flat performance this past December. “The latest results indicate that commercial property price growth in the US has paused six years into the post-crisis recovery,” said Moody’s Director of Commercial Real Estate Research, Tad Philipp. It’s not all bad news though. The agency also found that apartment prices continue to rise, with prices up 0.7% in January and 2.7% over the past three months. Looking at LTV, Moody’s found that retail and office properties built up modest equity cushions that have brought down their average LTV ratios, while apartments and CBD office have seen significantly more appreciation than the other sectors, and as a result their average LTV ratios have improved.

A CoStar report on the state of CRE is more upbeat than Moody’s. In Costar’s report, the company found that CRE “slowed in the first month of 2016, compared to the ‘robust pace’ of the last three months of the prior year,” according to a story in about both Indices. CoStar said that month-over-month growth rates can show volatility but year-over-year growth rates are strong. “January 2016 marked the 35th consecutive month of double-digit annual growth in the value-weighted US Composite Index and the 25th consecutive month of double-digit annual growth in the equal-weighted US Composite Index,” CoStar said.

Don’t call these buildings old. Instead, call them vintage! Adaptive reuse is a hot topic but why go through the trouble and expense of transforming obsolete buildings for the 21st century, rather than starting from scratch? asked Commercial Property Executive in a new story. They gave three reasons: First, in many desirable areas, there is little space for new construction. Second, there is an opportunity to bridge the region between the city and suburbs. And, finally, there are many great buildings just sitting vacant waiting to be given new life.

8+1 (That’s 9) Things You Need To Know

  1. Ultra-high-net-worth individuals keen for CRE
  2. Mall mania! Hot shopping spots expanding across South Florida
  3. Strong fundamentals underpin US CRE
  4. Blackstone’s Jon Gray shares strategic CRE insights
  5. How driverless cars will shape cities of the future
  6. Legislation changes mean new foreign money for US CRE investments
  7. Amazon to open second brick-and-mortar bookstore in San Diego
  8. What will happen in CRE this year?
  9. Cap rates hold their ground in CRE