Commercial property prices rise in early 2013

Commercial pricing improved in February.

Commercial property managers may have experienced a multitude of improving conditions throughout the market in recent months. One of these aspects is pricing, as the figures showed positive jumps in February.

Commercial property pricing experienced monthly declines during February compared to January, according to a report from CoStar Group. However, there were notable improvements in pricing that month when compared to the same period in 2012. The firm's Commercial Repeat-Sale Indices showed the equal-weighted U.S. Composite Index fell 1.4 percent from January to February. However, this reading was more than 5 percent improved from the same point in 2012.

There were also marked changes in the value-weighted U.S. Composite Index. The report showed that the figure dropped 0.7 percent from January, but was still 6 percent higher than one year earlier.

Sales transactions were not at the levels experienced during the final few months of last year, but there were still notable gains, the report noted. This was due to there being nearly $3 billion in these transactions. That figure was not much different from the typical average during that period. 

Overall recovery for investment grade properties continued in February, as well. From the low point of the market in October 2009, this area has recovered by nearly 18 percent, the report said. Pricing also has improved markedly, as it was 6 percent higher than the low point in 2011.

Distressed property sales also continued to plummet during February, as this figure dropped to 15.9 percent of all transactions mapped, the report added. This was notably lower than in January, when the figure was 18 percent.

Industry members feel positive about market direction
As prices continued to ameliorate, more members of the commercial real estate industry are feeling better about prospects, overall. Much of this is due to feelings that investment will rise markedly this year.

Nearly two-thirds of industry members explained they feel that there will be a heightened level of commercial investment in the market from Brazil, according to a report from Akerman Senterfitt. This may be followed by strong investment in the market from Venezuela. Nearly one-third think that overall American commercial investment may see a sizable portion come from foreign investors. Close to 40 percent noted that one of the most significant fund portions will come from equity funding.

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