Commercial market conditions improve during July

The commercial real estate market recently improved.

Prices and other important aspects of the commercial real estate market continued to improve for property management companies during July, according to a report from CoStar.

Improvement for multiple types of commercial properties occurred during the month, and it could signal that recovery is in full swing. CoStar's Commercial Repeat Sales Indices showed that the more affordably priced real estate properties experienced improvements in value during July. Specifically, the equal-weighted composite index rose by approximately 6 percent in July when compared to the same month in 2011, which brought it more than 6 percent higher than the low level experienced in March of last year.

High-price commercial properties show market growth

The value-weighted composite index, which shows the price improvements for properties with the highest value, rose by 11 percent during July when compared to July of last year, the report explained. Additionally, this figure is up by nearly 35 percent from the cycle's low point in January 2010. Despite this, the valuation still is nearly 20 percent below the peak, which was in September 2007.

Overall commercial real estate pricing grows

Slower growth occurred for the total market, the report said. The equal-weighted general commercial index improved 1.6 percent in July when compared to the same point in 2011. This helped the figure rise to nearly 4 percent through the first seven months of this year.

Additionally, the equal-weighted investment grade index rose approximately 2 percent during the month from June's level, the report said. When looking at the figure over the past year, it rose by more than 5 percent. The improvements could further support the fact that recovery ramped up in recent months.

Sales situation also gaining strength

The report also found that overall sales conditions improved in July. Commercial properties up for sales experienced a decline in days on the market by nearly 2 percent from the end of the first three months of the year. Initial asking prices, as well as the final price for a sold property experienced its gap close by more than 2 percent.

Foreclosure sales dropped in July, as only 16 percent of total sales were in this category, the report added. There was also a more than 11 percent drop in properties taken off the market after no sale occurred.

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