Commercial Property Price Index
Pan-European Commercial Property Price Index
Covid Declines Vary by Property Type
Newport Beach, CA, July 7, 2020 — The Green Street Commercial Property Price Index was unchanged in June. Price adjustments reflecting the economic slowdown and uncertainty brought on by the coronavirus pandemic were incorporated into index values several months ago. The headline all-property index is down 11% from pre-Covid levels.
“Price discovery is going to take some time, but something like 10% lower still feels where things will shake out for the average property,” said Peter Rothemund, Managing Director at Green Street Advisors. “However, the range of outcomes is wide, so it’s dangerous to talk averages. Prices of properties with long-term leases to high quality credits, and/or those where underlying demand is largely unaffected, may see little change. Those where the income stream is more at risk will see larger declines, and where it’s most in jeopardy expect haircuts of 20%, or more.”
Green Street Commercial Property Price Index
Indexed to 100 in August 2007Download CPPI Report Download CPPI Data
All Property CPPI weights: retail (20%), office (17.5%), apartment (15%), health care (15%), industrial (10%), lodging (7.5%), net lease (5%), self-storage (5%), manufactured home park (2.5%), and student housing (2.5%). Retail is mall (50%) and strip retail (50%).
Core Sector CPPI weights: apartment (25%), industrial (25%), office (25%), and retail (25%).
Change in Commercial Property Values
Amount property values have increased over this period
What makes our commercial property price index unique?
There are significant differences between the Green Street CPPI and other indices that track commercial property prices. Green Street's CPPI is appraisal-based. Appraisal-based indices are only as good as the valuation estimates used to construct them, and Green Street has long devoted sizable resources to deriving accurate estimates of the values of the properties owned by REITs. Most other indices are transaction-based.
Green Street's Pan-European Real Estate Analytics platform covers 25 of the most liquid European real estate markets across the industrial, office, and retail property sectors. The Commercial Property Price Index is a time series of unleveraged property values across these sectors and markets, and captures the prices at which commercial real estate transactions are currently being negotiated and contracted. Features that differentiate this index are its timeliness, its emphasis on average institutional quality properties, and its ability to capture changes in the aggregate value of the commercial property sector.