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April Showcases Weak Pricing Growth | Commercial Property Executive

The first look at how commercial real estate prices have started off the second quarter shows continued lethargy. The Ten-X Commercial All-Property Nowcast declined 0.1 percent in April from the previous month, leaving the index of CRE pricing up just 0.8 percent from a year ago. Pricing remained soft across all the property segments in April.

Office was the most noteworthy segment in April. The Ten-X Commercial Office Nowcast dropped 0.8 percent in April, following March’s 0.2 percent decline, bringing the office pricing index to just 2.6 percent above the year-ago level. Office pricing was weakest in the Southwest, which had been running particularly hot, with monthly declines in the Southeast and West as well. The Northeast and Midwest posted gains in the month.

Recently released data by Smith Travel Research showed the weakest annual growth pace for RevPAR for this cycle in the first quarter and the Ten-X Commercial Hotel Nowcast reflects this with weaker pricing for hotel properties. The Hotel Nowcast declined 0.1 percent month-to-month in April leaving the price index up just 0.8 percent year-over-year. According to the nowcast, hotel pricing has been flat since early 2016, when RevPAR growth peaked for the cycle. Pricing was down in all regions except the Midwest.

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April Showcases Weak Pricing Growth.

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