In a surprising twist, suburban office achieved the greatest price growth at 14.8% of all CRE asset classes over the last year, besting investor favorites multifamily and industrial.
John Chang of Marcus & Millichap notes that the price growth in the sector reflects three factors: "a pricing bounce, a disproportionate share of well-leased properties in the sales data, and some investor speculation."
Unlike the price gains notched in multifamily and industrial, suburban office appreciation is not well supported by rent growth, which was only up by 0.6% or vacancy rate change.
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