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Price increases continue for commercial real estate

On Behalf of | Sep 22, 2015 | Uncategorized

Kansas investors who participate in the commercial real estate market may be interested to learn that data from the most recent quarter demonstrated that the prices are still rising. The month of July brought a 0.7 percent price increase, while the three-month period had an increase of 2.8 percent overall.

This data comes from the Moody’s/RCA Commercial Property Price Indices, or CPPI. The composite rises were taken from across different types of property, with retail properties showing the greatest increase at 1.7 percent. Multi-family properties showed the second highest increase for the month, with 1.0 percent. Office properties increased by 0.2 percent.

By contrast, commercial industrial properties fell by 0.1 percent. Industrial assets have the lowest increase of all property types, amounting to 10.5 percent in the last 12 months. While office buildings in general had an increase of 18.2 percent over the 12-month period, those located in central business districts demonstrated the highest increase at 23.0 percent. The real estate investors who fared the best in the past five years were those who purchased commercial properties in May of 2010 and sold them in May of this year. Those investors reaped profits averaging 80.8 percent.

A large part of successfully investing in commercial property involves understanding when it is a good time to buy and when it is a good time to sell the property interests. People who are interested in involvement in the commercial real estate market may want to consult with an attorney who is familiar with commercial real estate law and the markets. Such an attorney may help clients to analyze the market in order to provide guidance on when they should purchase. The attorney may also advise clients if they should instead decide to sell assets they own.