Posted on March 8, 2016 · Posted in Industrial / Flex, Investments, Multi-Family, Office, Retail

For the first time in five years, U.S. commercial property values decreased across all property types last month.

The overall drop amounted to 0.3 of a percent, according to Ten-X, formerly Auction.com, an online real estate marketplace based in California’s Silicon Valley.

Ten-X chief economist Peter Muoio attributed the hit to “sizable monthly price declines in the office and hotel segments.” Muoio said in a news release that current pricing is on par with what the firm saw last November.

“While we’ve been reporting a gradual flattening in recent months, this is the first all-sector decline seen since January 2011,” Muoio said.

Office pricing dropped 2.7 percent in February from January, pulling year-over-year gains down to 3.3 percent. In late 2015, annual growth topped 12 percent.

The hotel segment reported its fourth consecutive monthly drop, falling 1.3 percent from January and lowering its year-over-year gain to 5.2 percent, the lowest since summer 2014. Reduced foreign travel spending due to the strong U.S. dollar, an overload of supply hanging in the pipeline and the lodging website Airbnb were cited as factors weighing down hotel values.

While the multifamily, retail and industrial sectors jumped about 1 percent each, the increases weren’t hefty enough to balance out the declines.

“While online retail sales will continue to hold up industrial property values in the short term, global economic shakiness and the strong dollar may disrupt trade flows, impeding demand for industrial space,” Muoio said.

 

Source: DBR

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