Like the MIT/CRE Property Index, Standard & Poor’s also tracks commercial real estate (CRE) prices for various commercial property types.The recent results reveal a marked slowing of price appreciation across all classes of commercial real estate with some components even declining.
The charts below show the National index and the component indices since 1994 (click for larger).
Comparing the MIT/CRE and S&P/GRA indices, it’s apparent that during economic slowdowns the GRA index tends to flatten out while the MIT indices indicate outright decline.
For example, the MIT/CRE appears to have captured a contraction in commercial properties that occurred following the “dot-com” bust while the S&P/GRA never showed declines on a year-over-year basis… only a steep decline in appreciation and several months of flattening.
For now, it’s important to reflect on both reports until there is more clarity on the state of the commercial property markets.
