PRESS RELEASE

CCRSI RELEASE – May 2022
(With data through April 2022)

 
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Complete CCRSI data set accompanying this release

This month's CoStar Commercial Repeat Sale Indices (CCRSI) provides the market's first look at commercial real estate pricing trends through April 2022. Based on 1,826 sale pairs in April 2022 and more than 270,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

CCRSI National Results Highlights

• U.S. COMPOSITE PRICE INDICES SHOW PROMISE AFTER A SLOW START TO THE YEAR AS PRICE GAINS ACCELERATE IN SECONDARY AND TERTIARY MARKETS. The value-weighted U.S. Composite Index, which is more heavily influenced by high-value trades common in core markets, nudged a bare 0.1% higher in April 2022 but remained at 292, applying the brakes to the prior two months of declines. The index was up by 15.1% in the 12-month period that ended in April 2022 and is 26.1% higher than it was in February 2020, before the onset of the COVID-19 pandemic, but is off from its record high of 300 seen in January 2022.

• The equal-weighted U.S. composite index, which reflects the more numerous but lower-priced property sales typical of secondary and tertiary markets, rose by 1.4% to 299 in April 2022, reaching a record high, compared to its gain of 0.2% in March 2022. The index rose by 14.2% in the 12-month period that ended in April 2022 and is now 24.5% above its pre-pandemic level in February 2020.

• THE RISE IN THE EQUAL-WEIGHTED COMPOSITE INDEX PULLED BOTH SUB-INDICES HIGHER. The investment grade sub-index, more heavily influenced by higher-value assets, rose by 1.4% in April 2022 over its March 2022 level, its first gain in 5 months. At 273, the sub-index is below its peak of 283 reached in November 2021.

• The general commercial sub-index, more heavily influenced by trades of smaller, lower-priced assets, rose by 1.3% in April 2022, an acceleration over its March 2022 gain of 1.0% and is now at its highest level on record.

• The general commercial segment has been in favor of late as it has seen price growth of 15.4% over the 12-month period that ended in April 2022 and is 26.3% higher than its February 2020 pre-pandemic level, compared to the investment grade segment, which registered a gain of 10.1% over the same period and is 17.8% higher than its February 2020 level.

• TRANSACTION VOLUME SLIPPED IN APRIL 2022 FROM THE SOLID VOLUME RECORDED IN MARCH. Transaction volume fell by 21.7% to $14.8 billion in April 2022, led by a 27.9% pullback in investment grade transaction volume over the month, while the general commercial transaction volume fell by 9.7% over the same period to $5.8 billion. There were 375 fewer deals in April 2022 than the month prior, a decline of 17.0%. However, transaction volume was 40.9% higher in April 2020 than in February 2020, and the number of deals was 42.9% higher than in February 2020, before the onset of the pandemic, marking a steep recovery from pandemic-related capital market strains.

• Composite pair volume of $228.1 billion in the 12-month period ending in April 2022 was more than double the volume in the 12-month period that ended in April 2021. The increase in volume was broad-based with similar increases in both the investment grade segment, which gained 104.9% over the same period, and the general commercial segment, which rose by 94.4%, also over the same 12-month period.

• OTHER LIQUIDITY MEASURES POINT TO CONTINUED STRONG DEMAND. The average number of days on the market for for-sale properties declined to 209.5 days in April 2022, a fall of 0.8% over the prior month and the lowest it has been since the onset of the pandemic. Meanwhile, the sale-price-to-asking-price ratio rose by 0.3 percentage points to 95.3% in April 2022, its third consecutive monthly gain, and the highest it has been since March 2006, pointing to a very competitive buying market. The share of properties withdrawn from the market by discouraged sellers fell by 0.6 percentage points to 21.2% during April 2022 and by 4.7 percentage points over the 12-month period that ended in April 2021. This is the indicator’s lowest reading in the series’ history going back to July 2012, suggesting that sellers are achieving their sales targets.

• THE SHARE OF REPEAT-SALE TRADES THAT WERE DISTRESSED FELL IN APRIL 2022. About 1.4% of all repeat-sale trades were distressed in April 2022. General commercial distressed sales in April 2022 measured 1.0% of all repeat-sale trades, near its record low of 0.8% recorded in December 2021. Investment grade distressed sales accounted for 0.4% overall in April 2022, hovering just slightly above its record low of 0.2% recorded in November 2021.

About The CoStar Commercial Repeat-Sale Indices

The CoStar Commercial Repeat-Sale Indices (CCRSI) are the most comprehensive and accurate measures of commercial real estate prices in the United States. In addition to the national Composite Index (presented in both equal-weighted and value-weighted versions), national Investment-Grade Index, and national General Commercial Index, which are reported monthly, 30 sub-indices in the CoStar index family are reported quarterly. The sub-indices include breakdowns by property sector (office, industrial, retail, multifamily, hospitality, and land), by region of the country (Northeast, South, Midwest, and West), by transaction size and quality (general commercial, investment-grade), and by market size (composite index of the prime market areas in the country).

The CoStar indices are constructed using a repeat sales methodology, widely considered the most accurate measure of price changes for real estate. This methodology measures the movement in the prices of commercial properties by collecting data on actual transaction prices. When a property is sold more than once, a sales pair is created. The prices from the first and second sales are then used to calculate price movement for the property. The aggregated price changes from all the sales pairs are used to create a price index. Historical price indices are revised as new data is recorded.

CONTACT:

Matthew Blocher, Vice President, Marketing & Communications, CoStar Group (mblocher@costar.com).

For more information about the CCRSI Indices, including the full accompanying data set and research methodology, legal notices, and disclaimer, please visit http://costargroup.com/costar-news/ccrsi.

ABOUT COSTAR GROUP, INC.

CoStar Group, Inc. (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret, and gain unmatched insight on commercial property values, market conditions and current availabilities. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. Realla is the UK’s most comprehensive commercial property digital marketplace. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time we plan to utilize our corporate website, www.costargroup.com, as a channel of distribution for material company information. For more information, visit www.CoStarGroup.com