Despite seasonal volatility in the first quarter, commercial real estate prices across the board posted strong annual gains, demonstrating the breadth of the pricing recovery as investment activity expands across the property types.
Multi-family prices have had the best recovery by far of the four major property segments. After posting the strongest results in the first quarter, pricing in this segment is now up 33 percent from its trough in 2009. While the multi-family sector’s outperformance is partially driven by relatively stronger fundamentals, it is also a function of lenders, largely the GSEs, providing cheap debt financing following the downturn. However, there are signs of a deceleration in multi-family fundamentals, mainly as a result of growing supply, especially in markets where pricing has already reached its prior peak level. The multi-family index’s gains of 0.8 percent in the first quarter marked a deceleration from its quarterly average pace of 3.2 percent over the past two years.
Read more...Apartment Deceleration? | Commercial Property Executive
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