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U.S. commercial property prices hit record levels last month, a new report has revealed.
The latest Green Streets Advisors' commercial property index moved one percent higher than the record achieved in August, 2007, fuelled by low interest rates and "modest economic growth." The index rose one percent in April, after a two percent increase the month before, Bloomberg reports. "It's likely we'll see more gains," Green Street analyst Peter Rothemund said in the statement. "Real estate continues to be attractively priced relative to the returns on offer in the bond market."
The Green Street index is based on the approximate value of REITs portfolios, which means it is only one representation of prices, because REITs typically own high quality properties which -- arguably especially now -- hold a higher value than the other market segments.
But it's not just Green Street analysts who are projecting positivity on US commercial real estate, according to a recent Bloomberg article rising confidence in US commercial property markets is driving investors away from bonds to the higher gains offered by office, apartment and industrial properties, as well as malls and retail centres in the US.
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