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U.S. commercial property prices rise in June, led by suburban offices
The RCA CPPI US National All Property Index gained 0.9% year over year in June, but apartments and retail prices continued to fall annually.
U.S. commercial property prices increased in June, led by suburban office gains, according to data cited by MSCI Real Assets. The RCA CPPI US National All Property Index rose 0.9% from a year earlier, and it increased 0.7% from Q1 to Q2, which MSCI said implied a faster annualized growth pace of 2.6%.
MSCI Real Assets also pointed to elevated borrowing costs in the U.S., noting the Federal Reserve has held its policy rate steady under new chairman Kevin Warsh. Despite that, suburban office prices posted 3.0% annual growth in June, while CBD office prices rose at the same monthly pace but remained 50% below a March 2022 peak.
Other property types diverged. Retail prices fell 0.1% year over year in June for a sixth straight monthly decline, while industrial prices turned negative on an annual basis, dropping 0.4% compared with June 2024.
Apartment prices declined 1.7% in June from a year earlier, the 10th consecutive month of annual decreases. The index also fell 1.2% from Q1, which annualizes to a more pronounced 4.8% decline, MSCI Real Assets said.