CRE Price Index Shows First Year-Over-Year Improvement in Years

CoStar has released its latest monthly National Composite Index of commercial real estate prices showing a 1.8% gain in October from September, and a 2.2% increase from the same period last year, marking the first year-over-year improvement since the economy and markets took a downturn in 2008. The year-over-year and monthly increases in October reflected long-awaited positive momentum in the composite index notes CoStar, which has now achieved a steady 1.3% average monthly growth rate over the six-month period between May and October 2011,

Other highlights from the CCRSI report include:

October's total of 743 sales pairs is on par with historical averages for transaction activity, according to the CCRSI December 2011 report. At the low point in the last downturn in January 2009, a total of 385 sale transactions were recorded.

As the average transaction size increases, overall transaction volume continues to trend upward, increasing by 29.4% annually in October, while the average deal size increased by 23%.

Stable fundamentals across most commercial property markets and product types, including improving occupancy, and softening downward pressure from distress sales, supported the solid performance of both the investment grade and general indices.

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