Industrial's February growth rate of 0.4% also represents a reversal from two consecutive months of price drops. The sector's annual growth of 5% is restrained compared to office or multifamily; conversely, though, it has been pretty evenly distributed across all regions.

The February story was different for retail and hotel, with both sectors showing pricing declines from the previous month. Retail pricing slid by 0.5% following a 0.4% erosion in January and an increase of 1.4% in December. Hotel prices once again continued their long-term downward trend in February, with values declining 0.8% after remaining flat in January. Ten-X notes that the lodging sector faces a number of challenges which have translated into investor bearishness on cap rates.

Commenting on the recent leveling-off in pricing gains generally, Muoio observes, “With a recent rise in interest rates and the new administration in Washington bringing the potential of radical policy changes to the fore, many investors are adopting a more conservative approach that may be contributing to the slowdown. While February represented a small step in the right direction, the industry will need to count on increased confidence from investors to regain its momentum.”

IRVINE, CA—Apartments once again fared best for monthly pricing growth in Ten-X's latest Commercial Real Estate Nowcast, which showed industrywide gains of 0.2% for the month of February. The monthly pricing index indicates modest growth over the past month after remaining flat in January.

Although February's pricing index reflects a year-over-year increase of 8.5%, that reflects a slower pace of growth than what the industry saw for much of 2016. “After a lengthy period of robust growth, pricing across commercial real estate has entered a period of lethargy during the past three months,” says Peter Muoio, chief economist with Ten-X. “While property valuations did tick up slightly, even the standout apartment market has begun to show signs of weakening in major cities, where a huge infusion of supply appears to have finally caught up with demand.”

Specifically, New York City and San Francisco have begun to see apartment rents flatten out after years of double-digit growth. Even so, multifamily fundamentals generally remain strong and the sector nationally experienced monthly pricing gains of 1.4% in February, and has enjoyed Y-O-Y growth of 16.6%, nearly twice the industrywide rate.

Office and industrial both grew at a considerably slower pace over the past month compared to multifamily. In the case of office, though, the 0.2% increase in pricing represented a modest rebound after two consecutive months of pricing declines. Pricing for office is now up 22% Y-O-Y, although Ten-X notes that the annual growth pace reflects a weak showing at the start of last year.

Industrial's February growth rate of 0.4% also represents a reversal from two consecutive months of price drops. The sector's annual growth of 5% is restrained compared to office or multifamily; conversely, though, it has been pretty evenly distributed across all regions.

The February story was different for retail and hotel, with both sectors showing pricing declines from the previous month. Retail pricing slid by 0.5% following a 0.4% erosion in January and an increase of 1.4% in December. Hotel prices once again continued their long-term downward trend in February, with values declining 0.8% after remaining flat in January. Ten-X notes that the lodging sector faces a number of challenges which have translated into investor bearishness on cap rates.

Commenting on the recent leveling-off in pricing gains generally, Muoio observes, “With a recent rise in interest rates and the new administration in Washington bringing the potential of radical policy changes to the fore, many investors are adopting a more conservative approach that may be contributing to the slowdown. While February represented a small step in the right direction, the industry will need to count on increased confidence from investors to regain its momentum.”