Latest CoStar Commercial Repeat-Sale Analysis: Real Estate Prices Continue
Positive Momentum in November on Strength of Improving Fundamentals
Strong Growth in the General Commercial Index Signals Continued Broad-Based
WASHINGTON, Jan. 16, 2013 (GLOBE NEWSWIRE) -- This month's CoStar Commercial
Repeat Sale Indices (CCRSI) provide the market's first look at November 2012
commercial real estate pricing. Based on 929 repeat sales in November 2012 and
more than 100,000 repeat sales since 1996, the CCRSI offers the broadest
measure of commercial real estate repeat sales activity.
November 2012 CCRSI National Results Highlights
*NOVEMBER PRICES SEE MEASURED IMPROVEMENT: With the uncertainty surrounding
the U.S. elections in investors' rear view mirror, commercial real estate
prices notched modest gains in November. The two broadest measures of
aggregate pricing for commercial properties within the CCRSI—the
value-weighted U.S. Composite Index and the equal-weighted U.S. Composite
Index—advanced by 0.9% and 1.1%, respectively.
*VALUE-WEIGHTED INDEX HITS HIGHEST LEVEL SINCE 2009: The U.S.
Value-Weighted Composite Index, which weights each repeat-sale by
transaction size or value (and therefore is heavily influenced by larger
transactions), rose 6.2% over the last year and has now increased 38% from
its pricing trough in 2010. Strong improvement in this index reflects
sturdy investor demand for core markets and assets that have been at the
forefront of the pricing recovery for commercial property.
*WITHIN THE EQUAL-WEIGHTED INDEX, THE GENERAL COMMERCIAL SEGMENT ACHIEVES
HEALTHY GAINS OVER PREVIOUS YEAR: The Equal-Weighted index weights each
repeat-sale equally and therefore reflects the influence of smaller
transactions.While pricing in the General Commercial segment bottomed
much later than the Investment Grade segment, the General Commercial Index
has made strong gains over the last year and is now up nearly 10% from its
nadir in the first quarter of 2011. Recent gains suggest investors are
increasingly branching out to second-tier markets and assets, as prices
for premium assets in top markets have become extremely competitive. The
decline in the Investment Grade Index, on the other hand, is mainly a
correction of a seasonal surge in sales activity in prior months.
*ABSORPTION GETS BACK ON TRACK:Aggregate net absorption of available space
for three major property types—office, retail, and industrial—picked up in
the fourth quarter after a lackluster turn in the third quarter.The rise
in leasing activity stems from healthy absorption in both the General
Commercial and the Investment Grade segments, indicating a broader and
more sustained real estate recovery.
*DISTRESS SALES DECLINE WITH IMPROVING FUNDAMENTALS: The percentage of
commercial property selling at distressed prices slid to 14.5% in November
2012, the lowest rate since mid-2009.
Several charts accompanying this release are available at
About the CoStar Commercial Repeat-Sale Indices
The CoStar Commercial Repeat-Sale Indices (CCRSI) are the most comprehensive
and accurate measures of commercial real estate prices in the United States.
In addition to the national Composite Index (presented in both equal-weighted
and value-weighted versions), national Investment Grade Index and national
General Commercial Index, which we report monthly, we report quarterly on 30
sub-indices in the CoStar index family. The sub-indices include breakdowns by
property sector (office, industrial, retail, multifamily, hospitality and
land), by region of the country (Northeast, South, Midwest, West), by
transaction size and quality (general commercial, investment grade), and by
market size (composite index of the prime market areas in the country).
The CoStar indices are constructed using a repeat sales methodology, widely
considered the most accurate measure of price changes for real estate. This
methodology measures the movement in the prices of commercial properties by
collecting data on actual transaction prices. When a property is sold more
than one time, a sales pair is created. The prices from the first and second
sales are then used to calculate price movement for the property. The
aggregated price changes from all of the sales pairs are used to create a
More charts accompanying this release are available at
For more information about the CCRSI Indices, including a detailed
methodology, fact sheet, legal notices and disclaimer, and an archive of
previous releases, please visit http://www.costar.com/ccrsi.
ABOUT COSTAR GROUP, INC.
CoStar Group (Nasdaq:CSGP) is commercial real estate's leading provider of
information, analytics and marketing services. Founded in 1987, CoStar
conducts expansive, ongoing research to produce and maintain the largest and
most comprehensive database of commercial real estate information. Our suite
of online services enables clients to analyze, interpret and gain unmatched
insight on commercial property values, market conditions and current
availabilities. Through LoopNet, the Company operates the most heavily
trafficked commercial real estate marketplace online with more than 6.5
million registered members and 3.5 million unique monthly visitors.
Headquartered in Washington, DC, CoStar maintains offices throughout the U.S.
and in Europe, including the industry's largest professional research
organization. For more information, visit http://www.costar.com.
This news release includes "forward-looking statements" including, without
limitation, statements regarding CoStar's expectations, beliefs, intentions or
strategies regarding the future. These statements are based upon current
beliefs and are subject to many risks and uncertainties that could cause
actual results to differ materially from these statements. The following
factors, among others, could cause or contribute to such differences: the risk
that the trends represented or implied by the indices will not continue or
produce the results suggested by such trends; the risk that investor demand
and commercial real estate pricing will not continue at the levels or with the
trends indicated in this release; the risk that there will not be a broader
and more sustained real estate recovery as indicated by the growth in the
general commercial index and the rise in leasing activity; the possibility
that investor demand for core markets and assets that have been at the
forefront of the pricing recovery for commercial property will not continue at
the current pace; and the possibility that investors will not continue to
increasingly branch out to second-tier markets and assets. More information
about potential factors that could cause actual results to differ materially
from those discussed in the forward-looking statements include, but are not
limited to, those stated in CoStar's filings from time to time with the
Securities and Exchange Commission, including CoStar's Annual Report on Form
10-K for the year ended December 31, 2011, and CoStar's Quarterly Report on
Form 10-Q for the quarter ended September 30, 2012, under the heading "Risk
Factors" section of each of these filings. All forward-looking statements are
based on information available to CoStar on the date hereof, and CoStar
assumes no obligation to update such statements, whether as a result of new
information, future events or otherwise.
CONTACT: Richard Simonelli
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