CRE pricing climbs in August

Commercial real estate prices rose in August.

The commercial real estate industry experienced improved pricing levels during August, according to the CoStar Commercial Repeat Sales Indices.

The value-weighted index rose more than 30 percent to its highest point since 2010. This index examines every repeat sale on the market by either value or total purchase size, the report explained. Much of the success was due to an increased level of investor demand in emerging cities. Additionally, the multifamily demand during the month from investors helped increase the level of pricing.

The report's equal-weighted index, an indicator of mainly smaller commercial transactions, rose more than 7.5 percent compared to the same period in 2010. This gain was its most impressive in six years. However, the levels showed a cumulative slowdown compared to the value-weighted index, likely due to a lack of tenant demand in the industry, as a whole.

CoStar noted that property absorption for office, retail and industrial properties were significantly lower during the third quarter than the previous three months.

Distressed sales dropped during August and are now at the lowest level since the midpoint of 2009, the report added.

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