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CRE Values Will Hold Steady in 2018

Even as retail is tied with industrial for the best value, Situs RERC's Kenn Riggs says that “pricing for high-quality retail is holding up although the market is quiet on the transaction side."

By Paul Bubny | Updated on December 18, 2017

Ken Riggs, president of Situs RERC. Situs RERC president Ken Riggs; the firm recently surveyed valuation experts for their 2018 outlook.

HOUSTON—Commercial real estate values are widely expected to hold the line in 2018, according to valuation experts surveyed by Situs RERC. Meanwhile, most expect the “tremendous” CRE price growth we’ve seen over the past cycle to continue, and also that “the eventual correction in values will be minimal.”

Eighty percent of those surveyed said CRE values would remain the same next year, while 20% predicted they will increase by 1%. The experts surveyed by Situs RERC also felt that cap and discount rates lately have moved from being “reasonable” to “aggressive,” reversing a trend they’ve seen over the past two years, although they’re expected to remain generally flat over the next 12 months.

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