While not all property sectors are experiencing gains, pricing increases in industrial, apartments and retail were just enough to outstrip declines in office and hotel. Industrial posted the largest increase in the report, with pricing rising by 1% in February. This reversed a January decline and narrowed the segment's year-over-year pricing decline to 3.3%.

The strengthening of the industrial economy in recent months has given investors renewed confidence that demand will continue. Still, threats about tariffs and other trade barriers remain a risk for this segment. Industrial pricing rose across most geographic regions, with only the Southeast posting a modest monthly decline.

Like industrial, pricing in the apartment sector edged up in February, Ten-X, posting a 0.4% increase after seven consecutive months of contraction. In the past year, apartment prices have remained essentially flat, with pricing just 0.2% higher than a year ago. Notably, sales on the Ten-X platform, Google search trends and investor sentiment all trended upwards in February, and Ten-X says this may be attributed to the fact that the recent wave of completions is easing and some investors are less worried about supply risk. Higher interest rates also have the potential to shift a modest amount of demand toward apartment rentals, since homeownership could become less affordable.

Interestingly, the retail section of the Nowcast increased 0.1% in February, even as the sector's headwinds—the rise of e-commerce and shifting consumer spending preferences—remain in place. The index is now 6% above year-ago levels, far outstripping the annual gains of any other segment. Nevertheless, the sector seems vulnerable to additional retail bankruptcies and store closings, especially if the US economic expansion slows. Regionally, the retail sector's pricing gains were concentrated only in the Northeast and West, while the rest of the country saw pricing declines.

On the other hand, the office sector of Ten-X's report saw a 0.3% decline in February, as it continues to follow a saw-tooth pattern. Office pricing is essentially unchanged since early 2017, since fundamentals paint a mixed picture, and year-over-year gains are at only 0.1%. Survey data showed investors are decidedly negative on cap rate trends in this segment, and bidding on office assets was weaker on the Ten-X platform. All regions saw declines in February, except for the Southeast, which climbed to its highest mark on record.

Hotel pricing also remains weak, with the sector posting its seventh decline in 10 months, falling 0.4% in February. Hotel pricing is now 0.9% lower than a year ago. Survey data is positive on the segment, perhaps fueled by the strength in domestic leisure and business travel, says Ten-X. Still, Google search trends and auction data on the Ten-X platform remains mixed. On an annual basis, the Southwest, Southeast and Midwest are down sharply, while the two coasts remain positive from a year ago.

“Even with the modest pricing increase since January, February's annual gains were the weakest on record,” said Muoio in the statement. He added that in the past year, only the much-maligned retail sector posted material pricing gains, while office and apartment saw little movement and industrial and hotel each moved backwards. “While it was encouraging to see the CRE Nowcast end a nine-month streak of declines, only time will tell whether the real estate sector is able to regain its footing in this economic cycle.”