Core Returns Set to ModerateBy
“We’re probably close” to the peak, says Rothemund.
NEWPORT BEACH, CA—At first glance, Green Street Advisors’ latest report looks like still another in a series. The Newport Beach, CA-based firm said Friday that its Green Street Commercial Property Price Index increased by 2% in November, and that this means property prices are up 10% for the year, thereby matching the gains that occurred in 2014.
However, the commentary from Peter Rothemund, senior analyst with Green Street, provides a hint that the status quo won’t hold forever. “Cap rates have been holding firm, and in some instances, even moving lower as investor demand for commercial property remains strong,” he says. “The question is whether that trend will continue. Cap rates look low when they’re compared to corporate bond yields. Said another way, properties look expensive. If this isn’t the peak, we’re probably close.”…
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