The star performer among major property sectors during December was retail, where values increased by 1.4% from the previous month. Ten-X notes that the sector typically is boosted during the busy holiday shopping season, although it remains hampered by e-retail competition and shifts in consumer spending behavior that appear to be permanent.

“The acceleration of wages across the country may be providing a much-needed boost” to retail, though, and may play a key role in its ability to overcome the secular headwinds it will continue to face in 2017, says Ten-X. Retail pricing is now up 8.3% since the end of 2015.

As for the monthly performance of other property segments, Ten-X sees indicates the market as paralleling the bond price declines that began after last month's election, even as equities have risen. Indicators underlying the firm's recent nowcasts suggest investors are treading carefully, reassessing future cap rates as they gauge valuations.

Growth in the office sector slowed significantly in December to 0.4%, Ten-X says, a drop from 3.7% in November. That being said, office pricing is now up 17.6% year over year, although the firm sees “stark regional differences” beginning to emerge across the market. Nowcast data showed increases in the Northeast and Southwest, but decreases in every other region.

While valuations for most property sectors were in positive territory for December—or, in the case of industrial, in positive territory prior to this month—hotels continued their steady decline, with pricing dropping by 0.7% from the previous month. Values have declined in every month of this year, and are down 6.6% from the year-ago period, although they rose 3.9% in the Southeast.

“Although the market as a whole took a step back during December, commercial real estate remains generally healthy across the country,” Muoio says. “Despite a number of challenges posed by technology and other factors, a growing economy continues to make most segments of the industry an inviting choice for investors.”

Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1, 2017 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.

IRVINE, CA—Commercial property pricing gained during the month of December, but the rate of increase at year's end was the slowest the industry has seen since midyear. That's the assessment from Ten-X, whose latest Commercial Real Estate Nowcast finds that nationwide commercial valuations have risen by 0.3% over the past month, with values in two property sectors taking a step backward.

“As a new president prepares to take office, we are experiencing unusual uncertainty,” says Peter Muoio, chief economist at Ten-X. “This appears to be contributing to an overall softening of the market, including slowdowns in such previously stronger sectors as industrial and multifamily. Investors are taking a wait-and-see approach toward many of their holdings, and this is holding back overall pricing growth.”

Industrial retreated from four consecutive months of strong gains, with prices slipping by 0.4% during December. Even so, thanks to the rise of e-commerce and cloud computing—both of which have spiked demand for warehouses and distribution centers—pricing nationally is up 7.6% from the year-ago period.

Multifamily values continued their growth story, yet December's gains were “tepid,” according to Ten-X. The month saw just a 0.4% rise from November. However, Ten-X notes that the apartment sector has flourished this year, with very low vacancies and healthy rent growth helping it to outpace all other areas of the market. In the new year, continued wage growth may prove a further boon to landlords, while rising mortgage rates could force many would-be homebuyers to rent instead.

The star performer among major property sectors during December was retail, where values increased by 1.4% from the previous month. Ten-X notes that the sector typically is boosted during the busy holiday shopping season, although it remains hampered by e-retail competition and shifts in consumer spending behavior that appear to be permanent.

“The acceleration of wages across the country may be providing a much-needed boost” to retail, though, and may play a key role in its ability to overcome the secular headwinds it will continue to face in 2017, says Ten-X. Retail pricing is now up 8.3% since the end of 2015.

As for the monthly performance of other property segments, Ten-X sees indicates the market as paralleling the bond price declines that began after last month's election, even as equities have risen. Indicators underlying the firm's recent nowcasts suggest investors are treading carefully, reassessing future cap rates as they gauge valuations.

Growth in the office sector slowed significantly in December to 0.4%, Ten-X says, a drop from 3.7% in November. That being said, office pricing is now up 17.6% year over year, although the firm sees “stark regional differences” beginning to emerge across the market. Nowcast data showed increases in the Northeast and Southwest, but decreases in every other region.

While valuations for most property sectors were in positive territory for December—or, in the case of industrial, in positive territory prior to this month—hotels continued their steady decline, with pricing dropping by 0.7% from the previous month. Values have declined in every month of this year, and are down 6.6% from the year-ago period, although they rose 3.9% in the Southeast.

“Although the market as a whole took a step back during December, commercial real estate remains generally healthy across the country,” Muoio says. “Despite a number of challenges posed by technology and other factors, a growing economy continues to make most segments of the industry an inviting choice for investors.”

Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1, 2017 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.