Commercial Real-Estate Prices Stumble in Global Capitals
According to The Wall Street Journal,
Commercial-property prices in major cities around the world tumbled in the second quarter, amid signs of slower global growth and heightened trade tension between China and the U.S.
High construction costs have limited new supply and helped stabilize U.S. commercial-property prices. Industrial, apartment and office values rose between 2% and 9% over the past 12 months, according to real-estate research firm Green Street’s Commercial Property Price Index.
But some sectors still experienced price declines, such as apartment and office market prices in Chicago and New York. U.S. mall values also fell 7% over the past year, Green Street said.
Cedrik Lachance, director of Green Street’s REIT research, said that while the economic backdrop has become more difficult for real-estate companies in the U.S., there has been slow but steady growth. He expects property prices in the U.S. to be flat in the next six to 12 months, with lower interest rates helping to offset slowing growth and a dip in business confidence and investment.
“Obviously, rates have helped a lot in terms of sustaining property prices,” he said.
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