CoStar Commercial Repeat-Sale Indices, September 2011 Release Print Release (PDF)
(With Data through July, 2011)
- This month’s CoStar Commercial Repeat Sale Index (“CCRSI”) provides the market’s first look at July 2011 commercial real estate pricing.
- The CCRSI provides the broadest measure of commercial real estate repeat sales activity based on more than 766 repeat sale transactions in July 2011, and more than 100,000 repeat sale transactions since its inception.
July 2011 Pricing Highlights
- The monthly National Composite Index increased by 1.0% in July 2011, the fourth consecutive month of positive price movement.
- In July, the price gain was 2.4% for the Investment Grade Index, and 0.7% for the General Commercial Index, and both marked the fourth month of increasing prices.
- For the first time since the downturn in 2008, the CCRSI showed synchronized price increases across-the-board, from investment grade to general commercial, for more than three months.
- The consistent positive price movement in general commercial property sales ended the bifurcation trend observed in commercial real estate prices during the second half of last year.
CCRSI Index Results
- CoStar’s Composite Commercial Repeat Sales Index increased by 1.0% in July 2011. It is now 1.6% below the same period last year and 33.1% below its peak in August 2007.
- CoStar’s General Grade Commercial Repeat Sales Index increased by 0.7% in July 2011, and is now 3.4% below its year-ago level and off 33.5% from its August 2007 peak.
- CoStar’s Investment Grade Commercial Repeat Sales Index increased 2.4% in July 2011 and is now 6.8% above the same period last year and 32.4% below its peak in August 2007.
National Composite Monthly Indices
Comparison Table for Current Release (Ending 6/30/2011)
| ||1 Month |
|1 Year |
|National All Property Type Composite ||1.0% ||-1.6% ||-33.1% |
|National Investment Grade ||2.4% ||6.8% ||-32.4% |
|National General All Property ||0.7% ||-3.4% ||-33.5% |
The CoStar Commercial Repeat-Sale Indices (CCRSI) are the most comprehensive and accurate measures of commercial real estate prices in the United States. In addition to the national Composite Index, national Investment Grade Index and national General Commercial Index which we report monthly, there are 28 sub-indices in the CoStar index family that we report quarterly. The sub-indices include breakdowns by property sector (office, industrial, retail, multifamily and land), by region of the country (Northeast, South, Midwest, West), by transaction size and quality (general commercial, investment grade), and by market size (composite index of the 10 largest metropolitan areas in the country).
The CoStar indices are constructed using a repeat sales methodology, widely considered as the most accurate way to measure price changes for real estate. The repeat sales methodology measures the movement in the prices of commercial properties by collecting data on actual sales prices when a property sells. When a property is sold more than one time, a sale pair is created. The prices from the first and second sale are then used to calculate price movement for the property. By aggregating all the price changes from all of the sale pairs, a price index is created.
COMMENTARY ON DATA
The CCRSI September 2011 report is based on data through the end of July 2011. Transaction activity decreased slightly in July, with a total of 766 sale pairs compared with the monthly average of 834 in the last six months. A similar slowdown in transaction activities was observed in both the Investment Grade and the General Commercial indices. The former reported 120 sales pairs, down from its six-month average of 130, while the latter had 646 pairs, down from a monthly average of 704. The decrease appeared to be a normal monthly fluctuation. At the low point in the most recent downturn, only a total of 375 transactions were recorded in January 2009.
Consistent with the decrease in pair counts, the overall dollar volume of sales also dropped slightly in July. While the average transaction size remained stable around $20 million for Investment Grade sale transactions, the average deal size for General Commercial transactions increased to $1.9 million, from an average of $1.6 million in the last six months.
We provide one graph below showing the sales counts and a second graph showing dollar volume. Note that by transaction count, General Grade sale pairs accounted for 84% of the total sales transactions, a ratio that has been the average for the last 12 months.
Number of Repeat-Sale Transactions by Count
Number of Repeat-Sale Transactions by Dollar Volume
National Property Type Quarterly Indices Through June of 2011
U.S. Regional Quarterly Indices Through June 2011
Office Top 10 Metros Quarterly Indices
Industrial Top 10 Metros Quarterly Indices
Retail Top 10 Metros Quarterly Indices
Multifamily Top 10 Metros Quarterly Indices
U.S. West Property Type Quarterly Indices
U.S. South Property Type Quarterly Indices
U.S. Midwest Property Type Quarterly Indices
U.S. Northeast Property Type Quarterly Indices
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For more information about CCRSI Indices, including our legal notices and disclaimer, please visit http://www.costar.com/ccrsi.