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Data Anyone? August 5, 2010

Posted by Erik Swanson in Articles, Research/Data, Retail News, Uncategorized.

CoStar has recently launched the CoStar Commercial Repeat Sales Index in an attempt to further decipher commercial real estate market movement and determine whether prices are rising or falling on a month-to-month basis.  According to CoStar, “…their repeat-sale analysis is based on an analysis of commercial properties that have sold more than once without a significant change in building characteristics between sales. CoStar used more than 85,000 repeat sale pairs in its U.S. database and provides data for two dozen sub indices. Such a measure is fundamentally comparable to stock and bond indices based on same-stock (or bond) price changes from one period to the next.”  With this index Costar is attempting to give the same level of analysis as the S&P/Case-Shiller home price index which is widely accepted as the best gauge of the residential real estate market.

The findings are interesting. In June, Costar compared 665 sales pairs. Transaction volume was up from 506 transactions recorded in May and significantly up from the low of 374 transactions in February of 2009.

Nationally, prices for all property types softened but Retail prices took the biggest hit. In the second quarter of 2010 a drop of 12% was partly due to 17% decline in the top ten markets pulling the National figures down. For the West Region Retail product in particular, the data tells a sad story. The West region has lost more value in its retail centers than any other region in the country and confirms our own analyses. The combined effects of lower overall NOIs due to lower overall rents and increased vacancy has prices off 35% from their peak in early 2008.

See CCRSI here.

The Costar CCRSI report provides some quality data and will be a useful tool to track the broader CRE market. And I guess it confirms a lot of what many of us already know; non-institutional markets transaction volume remain soft, pricing is “oscillating” and has not found its feet, the mortgage makers remain nervous, and the extending and pretending continues…

Sigh…More data anyone?



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