May 30, 2018
Latest Composite Price Indices Show Little Change After Posting Solid Annual Gains
Liquidity Indicators Reflect Conditions In A Fully Recovered Real Estate Investment Market
CCRSI RELEASE – MAY 2018
(With data through April 2018)
This month's CoStar Commercial Repeat Sale Indices (CCRSI) provides the market's first look at commercial real estate pricing trends through April 2018. Based on 1,228 repeat sale pairs in April 2018 and more than 192,000 repeat sales since 1996, the
CCRSI offers the broadest measure of commercial real estate repeat sales activity.
CCRSI National Results Highlights
COMPOSITE PRICE INDICES SHOWED LITTLE MOVEMENT IN APRIL. The value-weighted U.S. Composite Index, which reflects larger asset sales common in core markets, rose 1.4% in April 2018, contributing to a total gain of 9.1% in the 12-month period ended
in April 2018. The equal-weighted U.S. Composite Index, which reflects the more numerous but lower-priced property sales typical of secondary and tertiary markets, declined by 1.4% in the month of April 2018, but was still up by 8.6% in the
12-month period ended in April 2018.
GENERAL COMMERCIAL SEGMENT CONTINUES TO SEE STRONGER ANNUAL GROWTH IN EQUAL-WEIGHTED INDEX. The General Commercial segment, which is influenced by smaller, lower-priced properties, increased 9.6% in the 12-month period ended in April 2018. Meanwhile,
the Investment-Grade segment of the index, which tracks higher-value properties, rose a more modest 8.3% in the 12-month period ended in April 2018. The recent momentum in the General Commercial segment reflects the broad expansion of the
pricing recovery across markets and property types.
TRANSACTION VOLUME DOWN DUE TO DECREASE IN SALES IN INVESTMENT GRADE SEGMENT. Composite pair volume of $134 billion in the 12-month period ended in April 2018 was 1.4% lower than in the 12-month period ended in April 2017, illustrating a modest
deceleration in capital flows from the record-setting levels of the past two years. The decline in pair volume was most evident in the Investment-Grade segment, where transaction volume declined 4.8% in the 12-month period ended in April 2018
to $95.8 billion. Meanwhile, composite pair volume actually increased 8.1% to $38.2 billion in the General Commercial segment during the same time period.
OTHER LIQUIDITY MEASURES SHOW A FULLY RECOVERED REAL ESTATE INVESTMENT MARKET. The average time on the market for for-sale properties declined by 16.3% in the 12-month period ended in April 2018, although at 218 days, the average time on market
in April 2018 remains unchanged from January 2018. Meanwhile the sale-price-to-asking-price ratio narrowed by 1.3 percentage points over the last 12 months to 92.8% in April 2018. This ratio, which measures the spread between buyer and seller
expectations, remains the tightest on record for the CCRSI. The share of properties withdrawn from the market by discouraged sellers also receded by 2.9 percentage points to 26.5% during the 12-month period ended in April 2018.
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.
Richard Simonelli, Vice President, Investor Relations (202) 346-6394 (firstname.lastname@example.org).
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
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 over 5 million monthly unique visitors per month. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com
and Apartamentos.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's websites attracted an average of approximately
38 million unique monthly visitors in aggregate in the first quarter of 2018. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Canada with a staff of over 4,100 worldwide, including the industry's largest
professional research organization. For more information, visit www.costargroup.com.