Commercial Property Values Now 14% Above 2007 Peak
U.S. commercial property values have been nothing if not consistent in the past half decade, steadily ticking upward.
Real estate research firm Green Street Advisors reported Tuesday that commercial property values in March were 11% above March 2014, and unchanged from February. In all, values have now risen 87% since they bottomed out in 2009, and more than 14% from the prior peak in 2007, according to Green Street’s index.
Looking ahead, many expect more growth unless something should change with the broader economy. Given the low-interest rate environment and “debt capital that is freely available,” said Peter Rothemund, an analyst at Green Street, “you have a recipe for further property appreciation.”
Of course, one of those things that could change is interest rates, which observers have long been predicting will rise. In such a scenario, cheap debt—a key factor behind today’s record-high prices—would grow more expensive, putting pressure on values, real estate experts say.
Source: Wall Street Journal 3:02 pm ET Apr 7, 2015 – Elliot Brown