PRESS RELEASE DETAIL


Feb 25, 2016

Commercial Property Prices Resume Seasonal Pattern, See Slower Growth in January

Continued Improvement in Liquidity Measures Signal Positive Environment for Price Growth in 2016

Continued Improvement in Liquidity Measures Signal Positive Environment for Price Growth in 2016
 

CCRSI RELEASE – FEBRUARY 2016
(With Data through JANUARY 2016)

 

Print Release (PDF)

Complete CCRSI data set accompanying this release

 

WASHINGTON – February 25, 2016: This month's CoStar Commercial Repeat Sale Indices (CCRSI) provides the market's first look at commercial real estate pricing trends through January 2016. Based on 977 repeat sales in January 2016 and more than 155,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

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CCRSI National Results Highlights 

  • COMMERCIAL PROPERTY PRICE GROWTH MODERATED IN JANUARY. Repeating a pattern seen in previous years, investment activity in commercial real estate cooled considerably in January 2016. Both the equal-weighted and value-weighted U.S. Composite Indices within the CCRSI slowed in the first month of 2016 from the robust pace of the last three months of the prior year. The equal-weighted U.S. Composite Index declined by 0.3% and the value-weighted U.S. Composite Index increased by 0.6% in January 2016, after both indices posted average monthly growth of 0.8% in the period from October through December 2015.  
     
  • U.S. COMPOSITE INDICES STILL UP BY DOUBLE-DIGIT RATES ANNUALLY. While monthly growth rates within price indices can be volatile, year-over-year growth rates remain strong. January 2016 marked the 35th consecutive month of double-digit annual growth in the value-weighted U.S. Composite Index and the 25th consecutive month of double-digit annual growth in the equal-weighted U.S. Composite Index.  
     
  • BOTH ENDS OF CRE MARKET AFFECTED BY SLOWDOWN AS INVESTMENT GRADE AND GENERAL COMMERCIAL INDICES SEE DIPS IN JANUARY 2016. Within the equal-weighted U.S. Composite Index, both the Investment Grade and General Commercial Indices declined by 0.3%, indicating that price growth moderated at both the high and low end of the market during the month of January 2016.
       
  • LOWER DEAL VOLUME CONTRIBUTED TO SLOWER PRICE GAINS. Overall CRE investment activity declined in tandem with pricing in January 2016 after investors took a breather following the record-setting pace at the close of 2015. Despite the slowdown, the number of observed trades over the last 12 months ended in January 2016 increased by 5% over the prior 12-month period ended in January 2015. Importantly for the pricing indices, the number of distressed sales has declined by 36% over that same period. 
     
  • LIQUIDITY MEASURES SIGNAL CONTINUED POSITIVE ENVIRONMENT FOR PRICE GROWTH IN 2016. The average time on market for for-sale properties dropped sharply by 19.7% in the 12-month period ended in January 2016. Further, the sale price-to-asking price ratio narrowed by 3.1 percentage points in the 12-month period ended in January 2016 to 93.5%, the highest this ratio has been since July 2007. Also, 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 January 2016.  

 
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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. 
 

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Contact:

Keosha Burns, Director of Public Relations, CoStar Group (kburns@costargroup.com).

For more information about the CCRSI Indices, including the full accompanying data set and research methodology, legal notices and disclaimer, please visit http://www.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 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. . Through an exclusive partnership with Move, a subsidiary of News Corporation (NASDAQ: NWS, NWSA; ASX: NWS, NWSLV), Apartments.com is the exclusive provider of apartment community listings across Move’s family of websites, which include realtor.com®, doorsteps.com and move.com.  CoStar Group’s websites attracted an average of more than 22 million unique monthly visitors in aggregate throughout 2015. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Toronto with a staff of approximately 2,600 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, including continued improvement in liquidity measures and price growth. 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, 2015, which is filed with the SEC, including in the "Risk Factors" section of the filing, 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.
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