Supporting the growth in commercial property prices is a concomitant growth in space absorption. CoStar says net absorption across the three major property types—office, retail, and industrial—is projected to total 714.3 million square feet for the 12-month period ending in March, up 6.8% from the trailing 12-month period that ended in March 2016.

In keeping with the extension of the pricing recovery across the entire building size and quality spectrum, the general commercial segment saw the strongest rate of absorption growth over the past year, according to CoStar. Total net absorption in this segment is projected to grow 19.1% in the 12-month period that ended in March. Net absorption in the investment-grade segment is expected to increase by 1.2% in the same period.

CoStar data for the past four years show uneven Y-O-Y growth in net absorption for the trailing 12 months. By far the biggest increase—in terms of square footage and by percentage occurred between Q1 2014 and Q1 2015, when absorption grew by a total of 205 million square feet, or approximately 47%, from the 434.8 million square feet absorbed in the 12 months that ended March 31, '14. Since then, the Y-O-Y increases have been more modest; the annual growth at Q1 '16 was up by 28.4 million square feet, or about 4.4%.

Comparably modest was the growth in composite pair sales volume, including 858 repeat sales during the month of February. Composite pair volume of $132.2 billion in the 12-month period that ended Feb. 28 was 1.9% higher than in the previous 12-month period a year earlier. Even so, CoStar says that year-to-date through February, composite pair volume was lower than the same period in both '15 and '16, suggesting that the moderation in transaction activity that began last year from the record levels seen in '15 will continue through 2017.

WASHINGTON, DC—Pricing trends for the first two months of the year went separate ways, CoStar Group said Friday in reporting the latest CoStar Commercial Repeat Sale Indices. The firm's value-weighted US Composite Index, reflecting the bigger-ticket asset sales common in core markets, fell 1.4% in February 2017, after a similar decline of 1.2% the month before. Conversely, the equal-weighted US Composite Index, which reflects the more numerous but lower-priced transactions common in secondary and tertiary markets, increased by 1.4% in February on top of a 1.9% gain in January.

CoStar points out that both composite indices posted positive growth on a year-over-year basis. However, the firm says recent divergence in pricing trends likely reflects a maturing market cycle, especially for the high-value properties in core markets that led the recovery.

Bearing out this overall trend was the performance of a pair of sub-indices of the equal-weighted Composite Index. The general commercial segment of CCRSI's national composite index, influenced by smaller, lower-priced properties, increased 1.4% in February and 10.5% Y-O.Y.

On the other hand, the investment-grade segment of the index, which reflects the price influence of higher-value properties, advanced more slowly both for the month of February and for the 12-month period, posting gains of 0.5% and 2.8%, respectively. The recent price momentum in the general commercial segment demonstrates the expanding breadth of the pricing recovery across more markets, says CoStar.

Supporting the growth in commercial property prices is a concomitant growth in space absorption. CoStar says net absorption across the three major property types—office, retail, and industrial—is projected to total 714.3 million square feet for the 12-month period ending in March, up 6.8% from the trailing 12-month period that ended in March 2016.

In keeping with the extension of the pricing recovery across the entire building size and quality spectrum, the general commercial segment saw the strongest rate of absorption growth over the past year, according to CoStar. Total net absorption in this segment is projected to grow 19.1% in the 12-month period that ended in March. Net absorption in the investment-grade segment is expected to increase by 1.2% in the same period.

CoStar data for the past four years show uneven Y-O-Y growth in net absorption for the trailing 12 months. By far the biggest increase—in terms of square footage and by percentage occurred between Q1 2014 and Q1 2015, when absorption grew by a total of 205 million square feet, or approximately 47%, from the 434.8 million square feet absorbed in the 12 months that ended March 31, '14. Since then, the Y-O-Y increases have been more modest; the annual growth at Q1 '16 was up by 28.4 million square feet, or about 4.4%.

Comparably modest was the growth in composite pair sales volume, including 858 repeat sales during the month of February. Composite pair volume of $132.2 billion in the 12-month period that ended Feb. 28 was 1.9% higher than in the previous 12-month period a year earlier. Even so, CoStar says that year-to-date through February, composite pair volume was lower than the same period in both '15 and '16, suggesting that the moderation in transaction activity that began last year from the record levels seen in '15 will continue through 2017.