Ten-X Nowcast reports rise in commercial real estate values

Florida real estate investors might be interested to learn that U.S. commercial real estate values jumped by 0.6 percent between March and April, according to the latest Ten-X Commercial Real Estate Nowcast. The increase means valuations are 7 percent higher than in April 2015.

Ten-X compiles a pricing index that combines the firm’s proprietary transaction data with investor surveys and Google Trends data to predict commercial real estate valuation trends in real time. Ten-X’s chief economist notes that all major CRE sectors saw an increase in growth except the hotel sector, which fell 1 percent between March and April. It is the sixth consecutive month the hotel sector has dipped, and it is now up only 0.5 percent over April 2015. On the other hand, the apartment sector grew by 1.8 percent, giving it the strongest pricing trend in April. However, despite its recent gains, the apartment sector is up only 8.9 percent over last year. Ten-X reports that apartment investors are more cautious regarding cap rates than in previous months.

Meanwhile, the retail and industrial sectors also saw increases, with retail jumping 0.9 percent and industrial bumping up 0.4 percent for the month. The retail sector is up 9.4 percent over 2015, and the industrial sector is up 16.4 percent over last year. After three consecutive months of losses, the office sector gained 0.7 percent in April, but it is only 2.2 percent higher than last year.

Before buying or selling commercial real estate in Florida, it may be beneficial to consult real estate attorneys familiar with the state’s market trends. Legal counsel could carefully review all CRE transactions for potential problems that could delay a deal or give rise to future disputes.

Source: CPA Practice Advisor, “Commercial Property Values See Increase,” Isaac O’Bannon, May 4, 2016