RERC/CCIM Investment Trends Quarterly 2nd Quarter 2010 Highlights

The latest RERC/CCIM Investment Trends Quarterly found preliminary 12-month trailing size-weighted average price per square foot/unit increased for all property sectors during second quarter 2010.

CCIM members, log in to access the full report.

Other key findings include:

• RERC’s preliminary 12-month trailing transaction analysis showed that second quarter 2010 sales volume for the office sector increased approximately 45 percent over the previous quarter, while the volume for the retail sector increased nearly 25 percent. Volume for the industrial and apartment sectors increased by approximately 15 percent and 10 percent, respectively.
• RERC’s preliminary 12-month trailing size-weighted average price per square foot/unit increased for all property sectors during second quarter 2010. Office
  prices increased the most, with an approximate 20-percent increase in price per square foot during second quarter. The industrial, retail, and apartment sectors saw mid- to upper-single-digit increases.
  • Preliminary 12-month trailing data for second quarter 2010 showed the first increase in size-weighted prices for the office sector since fourth quarter 2007.
  • In addition, the 12-month trailing size-weighted prices have increased for the retail and apartment sectors for three consecutive quarters.
  • As for the industrial sector, 12-month trailing prices have been stable over the past three quarters.
  • The hotel sector showed an uptick in size-weighted pricing during first quarter 2010, and continued that trend during second quarter.
• Preliminary analysis of current quarter data (except for increases in volume) continues to show much volatility in second quarter 2010. This is an improvement over the downward spiral we had been seeing, and is considered a step toward stabilization, but is unreliable for spotting trends on a quarter-to-quarter basis at this time.
• Preliminary analysis showed that RERC’s 12-month trailing weighted average capitalization rates decreased for all property sectors during second quarter 2010, except in the industrial sector, where the rate increased by 20 basis points.
• Preliminary investment conditions ratings improved across all property types during second quarter 2010. The hotel and retail sectors saw the greatest improvement from the previous quarter, with ratings of 4.3 and 4.5 respectively, on a scale of 1 to 10, with 10 being high. The apartment sector received the highest rating overall, with a score of 5.9, while the office sector received the lowest rating at 4.1.
• Preliminary results show that CCIM members continued to rate commercial real estate and cash higher than stocks and bonds during second quarter 2010. Commercial real estate received the highest rating at 6.1 on a scale of 1 to 10, with 10 being high, while bonds received the lowest rating at 4.4.

Published quarterly, the RERC/CCIM Investment Trends Quarterly report provides timely insight and analysis into transaction volume, pricing, and capitalization rates for core income-producing properties. The report is produced by the Chicago-based Real Estate Research Corporation (RERC) in association with and for the 16,000 members of the Chicago-based CCIM Institute.