US CRE Valuations Up, Driven By Demand In Multifamily, Office And Industrial Sectors

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Monthly commercial valuations are up 1% this month, thanks to robust multifamily, industrial and office sectors, according to Ten-X’s latest Commercial Real Estate Nowcast.

CRE pricing rose by 6.9% compared to a year ago, shows Ten-X’s Nowcast research. The firm uses proprietary technology, Google trends data and investor surveys to determine what's happening with CRE pricing in real time.

Multifamily pricing jumped 1.8% from September, driven by climbing rents and increased supply. The sector remains a hot grab for investors, pushing pricing up 14% compared to 2015, Ten-X chief economist Peter Muoio tells Bisnow.

“Investors have loved apartments and the sector has had a phenomenal run-up over the years. Even though supply has picked up, we still have healthy demand,” Peter says.

Peter Muoio, Ten-X EVP and Chief Economist
Peter Muoio, Ten-X Executive Vice President And Chief Economist

Industrial and office are also among the flourishing sectors this month. Thanks to the healthy labor market, which has nearly reached full capacity, office markets remain strong and pricing jumped 1.5% month-to-month in October and 14% year-over-year.

Industrial also continues to thrive even though manufacturing and trade in China, Europe and Canada has slowed, which typically means bad news for US industrial, Peter says. Industrial pricing was up 1.5% in October and 13% year-over-year.

E-retail has made the demand for industrial red-hot, same as cloud computing and data centers, and investors are paying more attention to that sector,” Peter tells us. “Legalized marijuana is also having a great impact in certain places that have passed laws.”

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