IRVINE, CA—According to the Ten-X Commercial Nowcast, commercial real estate prices rose 0.1% in February—the index's first gain after nine consecutive months of contraction, but the smallest annual increase since the report's inception. The monthly pricing index combines Google Trends data, Ten-X Commercial's proprietary transaction data and investor surveys to indicate CRE pricing trends in real time.

Peter Muoio, chief economist for Ten-X, tells GlobeSt.com that it's too soon to declare the bounceback a trend. “The slight uptick in pricing in February is not enough to declare a new trend toward further gains, especially since the movement was mixed across the property segments.” He adds that rising rates could certainly be an impediment to continued pricing gains, though relatively high cap spreads could help buffer that impact.

Additionally, says Muoio, increasing supply in certain segments and markets could pressure NOI and therefore prices. “On the positive side, continued economic strength could boost absorption and counteract supply issues. We are also looking to see if the favorable elements for commercial real estate investing in the new tax law increases capital flows into this asset class and expands the buyer pool and property prices.”