Commercial Property Price Index
Pan-European Commercial Property Price Index
Prices Increase for Most Properties
Newport Beach, CA, December 4, 2020 — The Green Street Commercial Property Price Index increased by 1.8% in November. Price increases were widespread, with only the more challenged sectors not participating. The all property index is 8% below pre-pandemic levels.
“Property pricing has firmed up over the past few months,” said Peter Rothemund, Managing Director at Green Street. “In several sectors it’s above, or close to, pre-Covid levels and only the harder-hit property types remain down 10% or more. With interest rates this low—and a vaccine coming—that’s not surprising. Cap rates that are, on average, in the 5% range look very attractive when BBB-rated corporate bonds yield around 2%, or perhaps 3% if one really stretches on term.”
Green Street Commercial Property Price Index
Indexed to 100 in August 2007
Indexed to 100 in September 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.