PRESS RELEASE

CCRSI RELEASE – April 2024    
(With data through March 2024)

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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 March 2024. Based on 942 repeat sale pairs in March 2024 and 304,076 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 WERE MIXED IN MARCH 2024. The value-weighted U.S. Composite Index, which is more heavily influenced by high-value trades common in core markets, declined for the seventh consecutive month to 243, a slide of 1.1% from the prior month. In addition, the index fell 10.2% in the 12-month period ending in March 2024 and was 19.8% lower than the all-time high in July 2022.
• Meanwhile, the equal-weighted U.S. composite index, which reflects the more numerous but lower-priced property sales typical of secondary and tertiary markets, stepped 0.6% over the prior month, reaching 313 in March 2024. The index increased by 1.5% in the 12-month period ending in March 2024 but was 1.6% beneath the all-time high.
• Interest rate volatility has rippled through the repeat-sale indices over the prior six months, which has tended to send mixed signals on a month-over-month basis.

• BOTH MARKET SEGMENTS OF THE EQUAL-WEIGHTED COMPOSITE PRICE INDEX DECLINED IN FEBRUARY 2024.
• EQUAL-WEIGHTED PRICE INDEXES STEPPED HIGHER IN MARCH 2024. Despite inching the gap closer in recent months, the March 2024 spread between investment grade and general commercial has remained in its widest range since these series began in January 1998.
• The investment grade sub-index, more heavily influenced by higher-value assets, climbed 1.4% higher in March 2024. However, the index fell 4.4% over the 12-month period that ended in March 2024 and was 16.8% lower than the all-time high in June 2022.
• The general commercial sub-index, more heavily influenced by smaller, lower-priced assets, gained 0.1% in March 2024. This sub-index climbed 2.4% over the 12-month period that ended in March 2024 but was 1.4% below the September 2023 peak.

• SALES VOLUME INCREASED IN MARCH 2024 DESPITE LOWER TRANSACTION COUNTS. The number of repeat-sale transactions in March 2024 marked the second-lowest total since the depths of the pandemic lockdowns in June 2020, with 942 repeat sales. Despite the drop-off in the number of deals, the total consideration trading hands increased 6% over the prior month to $6.1 billion. Investment grade transaction volume saw the largest increase, with a 6.9% climb over the prior month to $3.5 billion. The general commercial segment grew 4.8% over February 2024 to $2.6 billion.
• Composite pair volume of $94.1 billion during the 12 months ending in March 2024 was 45.4% lower than the 12-month period that ended in March 2023. The decline in sales volume was largest in the investment grade segment, which fell 51.2% during the 12 months ending in March 2024 compared to the same period ending in March 2023. The investment grade segment accounted for 56.6% of the overall transaction volume during the last 12 months. The general commercial segment, which accounted for 43.4% of the 12-month transaction volume, fell 35.5% to $41.4 billion during the 12 months ending in March 2024.

• DISTRESSED REPEAT SALES INCHED HIGHER IN MARCH 2024. Approximately 30 of the 942 repeat-sale trades in March 2024, or about 3.2%, were distressed sales. General commercial distressed sales accounted for 19 of the distressed trades in March 2024, or 2.3% of general commercial repeat-sale trades. 11 investment-grade distressed sales were recorded in March 2024, accounting for 8.5% of investment-grade repeat sales trades.

Quarterly CCRSI Property Type Results

• PROPERTY SECTOR PRICE FLUCTUATIONS WERE MIXED IN THE FIRST QUARTER. The variance between the equal-weighted and value-weighted property type indices was most evident in the office sector. The value-weighted Office Index experienced a 34.5% price decline in March 2024 from its all-time high, while the equal-weighted Office Index fell 6.8%. Similarly, the value-weighted Multifamily Index fell 21.6% in March 2024 from its all-time high while declining 12.1% in the equal-weighted index.
• INDUSTRIAL INDICES SHOWED RARE SIGNS OF SOFTENING. The equal-weighted U.S. Industrial Index was 2.1% lower in the first quarter of 2024 than in the fourth quarter of 2023. Although annual price gains are slowing compared to peak pricing in 2022, this index was 3.7% higher in the 12-month period ending in March 2024. The Prime Industrial Index, characterized by repeat sales in Prime Metros, gained 2.5% over the fourth quarter of 2023 and 1.1% in the first quarter of 2024 compared to the first quarter of 2023.
• RETAIL PRICING WAS MIXED IN THE FIRST QUARTER OF 2024. The U.S. Retail Index rose 2.4% in the first quarter of 2024 and 4.3% in the 12-month period ending in March 2024. The tendency of high-profile pair trades can swing the data around at the top end of retail space, leading to strong quarterly fluctuations. The U.S. Prime Retail Index dipped 2% in the first quarter of 2024 while giving back 2.4% of value over the prior year.
• PRIME MULTIFAMILY PRICING FARED WORSE THAN THE U.S. IN MARCH 2024. The equal-weighted U.S. Multifamily Index fell by 1.8% in the first quarter of 2024 and 2.2% in the 12-month period ending in March 2024. In Prime multifamily markets, the index declined 2.8% in March 2024 while holding onto a 1.1% increase from the prior year ending in March 2023.
• OFFICE PROPERTIES PAIRED VALUE LOSSES IN THE FIRST QUARTER OF 2024. The U.S. Office Index gained 1.3% in the first quarter of 2024, taking its cumulative decline since the all-time high to minus 6.8%. Compared to the 12 months ending in March 2023, the U.S. Office Index gave back 1.5% of value in the 12 months ending March 2024. Price growth in the Prime Office Index jumped 2.8% higher in March 2024 over the prior month, although this index was down 4.5% in the 12-month period ending in March 2024.
• U.S. HOSPITALITY INDEX GAINED IN MARCH 2024. The U.S. Hospitality Index was up 0.9% in the first quarter of 2024, contributing to price gains of 5% in the 12-month period ending in March 2024. Compared to the all-time high in the third quarter of 2023, repeat sale values were off by 1.8% in the first quarter of 2024.
• U.S. LAND INDEX LED ALL PROPERTY TYPE SEGMENTS WITH 5.1% QUARTERLY GROWTH. The U.S. Land Index is the most volatile of the property-type indices. After posting a 1.3% loss in the prior quarter, the index surged 5.1% in the first quarter of 2024, recovering almost all losses from its first quarter of 2023 peak. Compared to the 12 months ending in the first quarter of 2023, the U.S. Land Index was 0.6% below peak pricing in the first quarter of 2023.

Quarterly CCRSI Regional Results

• VALUE-WEIGHTED PRICING HIT HARDEST IN THE SOUTH COMPOSITE INDEX, DOWN 2.5% IN THE FIRST QUARTER 2024. When pitted against peak pricing, the value-weighted South Composite Index was down 17.9% in the first quarter of 2024. Compared to the fourth quarter of 2023, the South Composite Index was split between the four major property types, with industrial and multifamily, down 2.4% and 2.3%, respectively. The South Office Index gained 1.2% over the fourth quarter of 2023, while retail jumped 2.2%. Annual gains were led by industrial at 4.9% over the prior 12-month period, while retail grew at 3.1%. The South Office Index gave back 3.7% of its value compared to the first quarter of 2023, and multifamily shed 4.1% of its value during the same time frame.
• THE NORTHEAST COMPOSITE INDEX PEELED OFF 1.8% OF ITS VALUE IN THE FIRST QUARTER OF 2024. Northeast office, industrial, and retail all gave back 1.8% of value compared to the fourth quarter of 2023. However, multifamily was a bright spot, gaining 1.6% in value over the prior quarter. Furthermore, the Multifamily Index led when compared to the first quarter of 2023, appreciating by 4%. Retail advanced by 2.8% during the same period while industrial was flat at minus 0.5% and office was off by 3.6%. As a regional value-weighted composite, the Northeast was 12.3% lower than the peak in the first quarter of 2024.
• RETAIL LED THE MIDWEST, GAINING 2.1% IN THE FIRST QUARTER OF 2024. Midwest Composite pricing fell the least in the value-weighted index, down 11% from the peak compared to the other three regions. In the first quarter of 2024, like most of the other regions, office and retail were up, gaining 1.1% and 2.1%, respectively, while industrial and multifamily were down, losing 0.3% and 1.9%, respectively. However, on an annual basis, industrial stood apart, up 10% from the first quarter of 2023, while retail came in 5.4% higher and multifamily squeezed out a 0.3% gain. Office was the lone sector in the red, down 0.4% from the first quarter of 2023.
• CUMULATIVE PRICE DECLINES FROM THE PEAK WERE MOST EVIDENT IN THE WEST. The West Composite value-weighted index was down 18.5% from the all-time high, the largest decline of the four regions. However, in the first quarter of 2024, office and retail were up 2.5%, while industrial and multifamily were down 2.4% and 1.9%, respectively. On an annual basis, multifamily was the only property type in negative territory, losing 5.5% of its value since the first quarter of 2023. Meanwhile, retail gained 4% as office and industrial moved sideways with 0.5% and 0.4% price gains, respectively.

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.

MEDIA CONTACT:

Matthew Blocher, Vice President, CoStar Group Corporate Marketing & Communications (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 https://costargroup.com/costar-news/ccrsi/.

ABOUT COSTAR GROUP, INC.

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