Building on last quarter’s release of new indices for the retail and industrial property sectors, CBRE indices for Q3 2013 showed commercial real estate capital values generally rose faster than leasing fundamentals across all property types.
This reflected several capital markets trends that have been prevalent for some time. First, returns in commercial real estate have been very strong relative to other major asset classes, attracting institutional capital sources to the sector. Second, the number of assets available for sale has remained very limited. Finally, commercial real estate fundamentals are expected to improve and catch up with capital markets demand as local economies continue to recover.
This optimism is buttressed by the lack of new construction and, hence, a very competitive leasing market, especially in mature commercial real estate markets.
Download the Global Rent and Capital Value Indices: Historic Analysis MarketView | Q3 2013