US Commercial Real Estate Prices Plunged in April, Mall Prices Collapsed [View all]

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US Commercial Real Estate Prices Plunged in April, Mall Prices Collapsed
by Wolf Richter • May 11, 2020 •

Tenants’ collapsing one after the other without replacement has a pernicious impact on property prices.
By Wolf Richter for WOLF STREET.


Before the coronavirus, some segments of commercial real estate (CRE) were red hot, others were hanging in there or declining, and one sector, malls, has been in deep trouble since 2016, with prices plunging. Then came the lockdowns. Property prices in every CRE segment fell in April, even those that were red hot. And prices of mall properties got crushed.

The overall Commercial Property Price Index (CPPI) by Green Street Advisors had peaked in the period of November 2019 through January 2020. In February and March, it ticked down. In April it plunged 9.4% from March, the second largest percent-drop in the data going back to the 1990s. The largest drop was 10.9% in October 2008, following the Lehman bankruptcy. Since the peak in January, the index has dropped 10.7% and is back where it had first been in May 2015:



There is sudden chaos in the industry, and the index designed to capture movements in near-real time has trouble capturing the massive month-to-month upheaval.

“The exact numbers are debatable, but property pricing is down about 10%,” said Peter Rothemund, Managing Director at Green Street Advisors, in the report. “Some property types, industrial for example, are probably faring better than that. Retail and lodging values are most likely doing worse.” ...............(more)

https://wolfstreet.com/2020/05/11/us-commercial-real-estate-prices-plunged-in-april-mall-prices-collapsed/