Office performance continues to drag down overall commercial real estate performance metrics, according to the RCA CPPI National All-Property Index for November.
The index fell 8% from a year ago but was flat month-over-month compared to October, which is perhaps a promising sign as it represents an improvement on the month-over-month drops of nearly 2%.
Downward trends were most acute for offices in the central business district, which fell 26% year-over-year while suburban office prices dropped 12.4%.
“Uncertainty around the future need for office space, as well as the shock of higher mortgage rates, has driven a decline in both sales volume and prices,” MSCI reported.
Property prices have slipped over the last year alongside sales volume, which in November dropped 60% YOY.
The industrial index was the sole property type to post either monthly or annual gains. Industrial prices slid at about midyear and have rebounded to positive annual growth in October and November.
The higher interest rate environment has caused apartment prices to slide by 12.1% year-over-year. They fell by 0.7% since October.
In November, the retail index dropped 0.3% from October and 6.7% from a year earlier.
The annual price growth decline in the retail sector began in January following it hitting an all-time peak in mid-2022.