PRESS RELEASE

CCRSI RELEASE – August 2022
(With data through July 2022)

 
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Complete CCRSI data set accompanying this release

This month's CoStar Commercial Repeat Sale Indices (CCRSI) provides the market's first look at commercial real estate pricing trends through July 2022. Based on 1,643 sale pairs in July 2022 and more than 276,600 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

CCRSI National Results Highlights

• U.S. COMPOSITE PRICE INDICES EDGE LOWER IN JULY 2022 AFTER REACHING NEW HIGHS IN THE PRIOR MONTH. The value-weighted U.S. Composite Index, which is more heavily influenced by high-value trades common in core markets, eased 0.8% lower to 301 In July 2022, compared to its revised June 2022 value of 303. The index was up by 12.6% in the 12-month period that ended in July 2022 and is 33.7% higher than before the onset of the COVID-19 pandemic in February 2020.

• The equal-weighted U.S. composite index, which reflects the more numerous but lower-priced property sales typical of secondary and tertiary markets, ticked one point lower to 317 in July 2022, but gained 16.6% in the 12-month period that ended in July 2022 and is 32.5% above its February 2020 pre-pandemic level.

• THE EQUAL-WEIGHTED COMPOSITE PRICE INDEX WAS PULLED LOWER BY ITS INVESTMENT GRADE SUB-INDEX. The investment grade sub-index, more heavily influenced by higher-value assets, fell by 1.4% in July 2022, its first decline in five consecutive months.

• The general commercial sub-index, more heavily influenced by smaller, lower-priced assets, stepped higher by 0.7% in July 2022, its fifth consecutive month of gains.

• The investment grade sub-index saw price growth of 17.0% over the 12-month period that ended in July 2022, marginally slower than prices in the commercial grade segment, which registered a gain of 17.4% over the same period. Annual gains of both sub-indices have been in the double digits since April 2021, an unusual streak as the economy recovers from its pandemic shock.

• TRANSACTION VOLUME PULLED BACK IN JULY 2022 TO ITS LOWEST LEVEL IN FIVE MONTHS. Transaction activity fell to $15.9 billion in July 2022, compared to the upwardly revised volume of $22.5 billion in June 2022, a 29.2% decline over the month. Investment grade segment transaction volume pulled back in July 2022 by 27.9% to $10.6 billion while the general commercial segment fell by 31.7% over June 2022 to $5.3 billion [in July 2022?].

• Composite pair volume of $241.9 billion in the 12-month period ending in July 2022 was 64.9% higher than the 12-month period that ended in July 2021, as the period included the stand-out volume transacted in Q4 of 2021. The increase in volume was larger in the investment grade segment, which gained 67.6% over the 12 months that ended in July 2022 and accounted for approximately two-thirds of the overall annual transaction volume. The general commercial segment, which accounted for roughly one-third of the transaction volume over the 12-month period ending in July 2022, rose by 59.8% over that period.

• OTHER LIQUIDITY MEASURES POINT TO CONTINUED STRONG DEMAND. The average number of days on the market for for-sale properties fell for its 11th consecutive month to 206.7 days in July 2022, a fall of 0.6% over the prior month and the lowest it has been since January 2020. Meanwhile, the sale-price-to-asking-price ratio retreated by 0.3 percentage points to 94.8% in July 2022 but remains near the historical high reached in May 2022, pointing to a very competitive buying market.

• The share of properties withdrawn from the market by discouraged sellers rose by 0.5 percentage points to 22.1% during July 2022 but is 1.4 percentage points lower than its July 2021 level. This indicator fell consistently from July 2020 through May 2022 but has inched higher for the past two months. Still near the historical lows reached in May 2022, the indicator suggests that sellers are mostly achieving their sales targets.

• THE SHARE OF REPEAT-SALE TRADES THAT WERE DISTRESSED REMAINS LOW. Only 25 of the 1,643 repeat-sales trades in July 2022, or about 1.5%, were distressed sales. General commercial distressed sales accounted for 20 of the distressed trades, or 1.2% of all repeat-sales trades, below its pandemic average. Only five investment grade distressed sales were recorded in the month, accounting for 0.3% of all repeat sales trades, a tick below its pandemic average and its lowest share since November 2021.

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 are reported monthly, 30 sub-indices in the CoStar index family are reported quarterly. The sub-indices include breakdowns by property sector (office, industrial, retail, multifamily, hospitality, and land), by region of the country (Northeast, South, Midwest, and 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 once, 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 the sales pairs are used to create a price index. Historical price indices are revised as new data is recorded.

CONTACT:

Matthew Blocher, Vice President, Marketing & Communications, CoStar Group (mblocher@costar.com).

For more information about the CCRSI Indices, including the full accompanying data set and research methodology, legal notices, and disclaimer, please visit http://costargroup.com/costar-news/ccrsi.

About CoStar Group, Inc.

CoStar Group, Inc. (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics. 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. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. Realla is the UK’s most comprehensive commercial property digital marketplace. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time we plan to utilize our corporate website, www.costargroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.