Record Prices for US Commercial Property
U.S. commercial property prices hit record levels last month, a new report suggests.
Green Streets Advisors' commercial property index moved one percent higher than the record achieved in August, 2007, fueled by low interest rates and "modest economic growth." The index rose one percent in April, after a two percent increase the month before, Bloomberg
"It's likely we'll see more gains," Green Street analyst Peter Rothemund said in the statement. "Real estate continues to be attractively priced relative to the returns on offer in the bond market."
As confidence rises in U.S. commercial markets
, investors looking for higher returns than those available from bonds are increasingly purchasing office and apartment properties, industrial buildings, malls and retail centers, according to Bloomberg
California-based Green Street bases the index on approximate value of portfolios of REITs which usually own high-quality properties. Not all studies agree about the levels of overall prices.
In February, the Moody's/Real Capital Analytics Commercial Property Price Index released in April was 20 percent less than a 2007 peak, Bloomberg