Latest CoStar Commercial Repeat Sale Analysis: Composite Price Indices Continue Upward Climb
WASHINGTON, Dec. 16, 2015 (GLOBE NEWSWIRE) -- This month's CoStar Commercial Repeat Sale Indices (CCRSI) provides the market's first look at commercial real estate pricing trends through October 2015. Based on 1,426 repeat sales in October 2015 and more than 150,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.
Several charts accompanying this release are available at http://resource.globenewswire.com/Resource/Download/e3479021-ea86-4193-9455-cd37474cbfce?size=o
CCRSI National Results Highlights
- COMMERCIAL PROPERTY PRICE GROWTH REMAINS STEADY. The two broadest measures of aggregate pricing for commercial properties within the CCRSI — the equal-weighted U.S. Composite Index and the value-weighted U.S. Composite Index — each increased by 0.9% in October 2015. The value-weighted U.S. Composite Index has advanced 12.3% for the 12 months ended October 2015, and has soared 17.3% above its prior peak level. The equal-weighted U.S. Composite Index by comparison, advanced by 11.3% for the 12 months ended October 2015, and remains 5% below its prior peak.
- TRANSACTION VOLUME ON PACE FOR RECORD YEAR IN 2015. Composite pair volume escalated to $102 billion through the first 10 months of 2015, marking a 28.2% increase from the same period in 2014. This increasing volume of property sales kept 2015 on track to be the strongest year for transaction volume on record for the CCRSI. The share of properties trading at distressed pricing also declined to 3.9% in October 2015, well below its recessionary peak of nearly 33%, and the lowest rate on record since August 2008.
- GENERAL COMMERCIAL SEGMENT HAS LED GROWTH IN EQUAL-WEIGHTED INDEX YEAR-TO-DATE. Recent stronger growth in the General Commercial segment, which is influenced by smaller, lower-end properties, demonstrates a broader-based pricing recovery. Within the equal-weighted U.S. Composite Index, the General Commercial segment increased 1% in October 2015 and 11.4% for the first 10 months of 2015, propelling the index to within 5.6% of its prerecession high. Meanwhile, the Investment-Grade segment, which is influenced by higher-value properties and initially led the price recovery in commercial property, advanced at a more moderate rate of 0.8% in October 2015 and 8.5% for first 10 months of 2015. Despite the recent momentum in the General Commercial segment, the Investment-Grade Index has advanced further in its recovery and has moved to within 1.9% of its prior peak.
- OTHER LIQUIDITY MEASURES SUPPORT A POSITIVE ENVIRONMENT FOR SELLERS. The average time on market for for-sale properties dropped sharply by 15.5% in the 12-month period ended in October 2015, the largest annual decline in this CCRSI metric since the recovery began. Meanwhile, the sale-price-to-asking-price ratio narrowed by 3.6 percentage points to 93.4% and the share of properties withdrawn from the market by discouraged sellers receded by 4.7 percentage points to 33.1% during the 12-month period ended in October 2015.
|Monthly CCRSI Results, Data Through October 2015|
|1 Month Earlier||1 Quarter Earlier||1 Year Earlier||Trough to Current|
|Value-Weighted U.S. Composite Index||0.9||%||3.7||%||12.3||%||88.1%1|
|Equal-Weighted U.S. Composite Index||0.9||%||2.7||%||11.3||%||48.6%2|
|U.S. Investment-Grade Index||0.8||%||2.6||%||11.1||%||62.7%3|
|U.S. General Commercial Index||1.0||%||2.7||%||11.4||%||47.6%4|
|1 Trough Date: January 2010 2 Trough Date: March 2011 3 Trough Date: March 2010 4 Trough Date: March 2011|
|Monthly Liquidity Indicators, Data Through October 2015|
|Current||1 Month Earlier||1 Quarter Earlier||1 Year Earlier|
|Days on Market||371||376||384||412|
|Average days on market and sale-price-to-asking-price ratio are both calculated based on listings that are closed and confirmed by CoStar's research team. The withdrawal rate is the ratio of listings withdrawn from the market by the seller to all listings for a given month.|
About The CoStar Commercial Repeat-Sale Indices
The CoStar Commercial Repeat-Sale Indices (CCRSI) is the most comprehensive and accurate measure of commercial real estate prices in the United States. In addition to the national Composite Index (presented in both equal-weighted and value-weighted versions), national Investment-Grade Index, and national General Commercial Index, which we report monthly, we report quarterly on 30 sub-indices in the CoStar index family. The sub-indices include breakdowns by property sector (office, industrial, retail, multifamily, hospitality, and land), by region of the country (Northeast, South, Midwest, and West), by transaction size and quality (general commercial, investment-grade), and by market size (composite index of the prime market areas in the country).
The CoStar indices are constructed using a repeat sales methodology, widely considered the most accurate measure of price changes for real estate. This methodology measures the movement in the prices of commercial properties by collecting data on actual transaction prices. When a property is sold more than once, a sales pair is created. The prices from the first and second sales are then used to calculate price movement for the property. The aggregated price changes from all of the sales pairs are used to create a price index.
More charts accompanying this release are available at http://resource.globenewswire.com/Resource/Download/136d0bdc-8a89-47b4-a3c3-0ec3cc170692?size=o
For more information about the CCRSI Indices, including the full accompanying data set and research methodology, legal notices and disclaimer, please visit http://costargroup.com/costar-news/ccrsi.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ:CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 10.0 million registered members. Apartments.com, ApartmentFinder.com and ApartmentHomeLiving.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. CoStar Group operates websites with over 23.7 million unique monthly visitors in aggregate as of September 2015. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Toronto with a staff of approximately 2,850 worldwide, including the industry's largest professional research organization. For more information, visit www.costargroup.com.
This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations, beliefs, intentions or strategies regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that the trends represented or implied by the indices will not continue or produce the results suggested by such trends, and the possibility that the volume of property sales does not continue at the current pace or result in 2015 being the strongest year for transaction volume on record for the CCRSI as expected. More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2014, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as the company's other filings with the SEC available at the SEC's website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements, whether as a result of new information, future events or otherwise.