CBD office breaks price slide
The CBD office sector ended a five-month price slide in May with an increase of approximately 2 percent, according to the latest Moody’s/RCA Commercial Property Price Indices.
Still, the sector remains down 2 percent over the last 12 months — during which all other CPPI components increased at least 4 percent — on the heels of record sales prices in early 2015. During that same 12-month period, apartment prices grew by nearly 12 percentage points, while core prices across property sectors grew only 5 percent.
Core yields have not inspired confidence either in 2016. The NFI-ODCE index returned an estimated 2.13 percent during the second quarter, after only returning 2.18 percent the quarter before, putting 2016’s pace well below the index’s one-year return of 11.82 percent.
The slowing of the core sector — especially CBD office — in both income and appreciation, is a big reason why commercial real estate invest