Commercial Real Estate (CRE) Prices on the Rise

dr dotzourGreat article from Texas economist, Dr. Mark Dotzour with the Texas A&M Real Estate Center.

Dr. Dotzour does a great job of providing a status report regard CRE pricing and the tightening of money due to the credit market.  Key points include:

  1. New construction has been slowed by the tight credit market in the U.S.
  2. It’s a classic case of too many dollars chasing too few deals.
  3. Real Capital Analytics (RCA) shows a 13.6% increase in commercial real estate pricing from the same time one year ago.
  4. CoStar Commercial Price Index shows that commercial real estate prices have increased by 8.4% from a year ago.  Retail showed the greatest appreciation.
  5. Capitalization Rates (Cap Rates) for trophy properties are as low as 4%.

Read more at Dr. Mark Dotzour’s blog post here.



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