Green Street Advisors

 

 

Wall Street Journal: U.S. Commercial Property Values Surge in Niche Sectors

According to The Wall Street Journal:

Student housing, manufactured homes and industrial property were the top performing commercial real-estate sectors in the past 12 months, according to new data from Green Street Advisors.

These three sectors outperformed the broader commercial property market, which saw values remain flat between June 2017 and the end of the first half of this year. Meanwhile, values fell 10% in the hard-hit retail sector during the 12-month period, according to Newport Beach, Calif.-based Green Street, which tracks the market with its Commercial Property Price Index.

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The plateau is partly due to rising interest rates, said Peter Rothemund, a senior analyst at Green Street. Rising interest rates make it more expensive to finance purchases and make the bond market relatively more attractive compared with property.

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Student housing also performed well over the past 12 months, chalking up a 10% increase in value, Green Street said. These properties are considered to be more recession-resistant than other asset classes because even in an economic downturn, college enrollments are expected to remain steady.

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Mall values in June have fallen 9% over the last 12 months and 18% since the end of 2016, according to Green Street.

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To read the full article from The Wall Street Journal, click here.