Ten-X CRE Nowcast

Real estate sees rare period of flat valuations

U.S. commercial real estate saw a rare period where valuations were flat valuations in January, marking the first time that the industry hasn’t seen monthly growth since February 2016. “While commercial real estate remains healthy overall, a sense of uncertainty has crept into the market over the last two months,” said Peter Muoio, chief economist. “The multifamily sector continues to see pricing growth month after month, but other property segments are being hampered by investors wary of a market that appears to be tightening.”

Over the past 12 months, pricing across commercial real estate is 8.1% higher. That said, the sector has posted several months of lackluster performance, Muoio noted. “Research indicates that investors are proceeding with more caution amid a tight cap rate environment, while operating fundamentals across the sectors generally have less room for continued improvement,” he added.

The apartment sector saw growth of 0.8% during January and is now up 16.2% over the past year, which represents its strongest annual gain since mid-2014. “Its consistently solid performance is reflective of stable demand from renters across the country, though Ten-X Research indicates that supply additions may increase vacancies and slow overall growth in many major markets in the near term,” Muoio said.

January NOWCAST*

Ten-X’s Commercial Real Estate Nowcast is calculated through a combination of Google Trends data, its proprietary transaction data and investor surveys to forecast CRE pricing trends in real time.

SectorNowcast IndexMonth-Over-Month % ChangeYear-Over-Year % Change
All Property190.408.10%