US Commercial Real Estate Market becoming Overpriced claims Report

Posted on 22 August, 2015 by Jodee Redmond

Real estate research firm Situs RERC has issued a report regarding the state of the US commercial real estate market, and the findings point towards the market becoming overpriced, particularly in the case of the leading markets.

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The report states that in the previous cycle, which ended in 2008, prices rose above their true values by more than 50 per cent and that, given the current conditions, it would not be surprising to see the same thing happen again.

Transaction volumes up to 30 June rose by 23 per cent, according to data collected by research firm Real Capital Analytics, and on a year-on-year basis, prices in all but one of the sectors monitored increased.

The retail sector saw prices rise by 11 per cent while prices in the industrial sector rose by 10 per cent. However the hotel sector saw the biggest rise with a 19 per cent increase in prices. In the office sector, on the other hand, prices were unchanged.

On a scale of 1 to 10 (with 10 indicating the best value in comparison to price) retail was the only sector where an increase in value was recorded, climbing from 5.1 in the first quarter of 2015 to 5.5 in the second quarter.




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