Latest CoStar Commercial Repeat-Sale Analysis: Composite Price Indices for Commercial Real Estate Soared in 2015

Double-Digit Price Growth Across All Regional and Property-Type Indices in 2015 Locks in Recovery

WASHINGTON, Jan. 27, 2016 (GLOBE NEWSWIRE) -- This month's CoStar Commercial Repeat Sale Indices (CCRSI) provides the market's first look at December 2015 commercial real estate pricing. Based on 1,496 repeat sales in December 2015 and more than 150,000 repeat sales since 1996, the CCRSI offers the broadest measure of commercial real estate repeat sales activity.

Several charts accompanying this release are available at 

CCRSI National Results Highlights

  • CCRSI COMPOSITE PRICE INDICES SOARED IN 2015. Improving CRE fundamentals, surging investor demand and liquid capital markets propelled the CCRSI composite indices upward in 2015. Demand for core property assets was especially strong. The value-weighted U.S. Composite Index rose 12.5% in 2015 to an all-time high that is 19.1% above its prerecession peak.
  • PRICING IN NON-PRIMARY MARKETS MADE SIGNIFICANT ADVANCEMENTS. While pricing in core markets set records in 2015, investors moving out on the risk spectrum in search of higher yields resulted in equally strong sales activity in non-core markets and property types, as reflected in the equal-weighted U.S. Composite index. Heavily influenced by lower-value properties typical of those in secondary and tertiary markets, the equal-weighted U.S. Composite Index rose 12.6% in 2015 and is now within 3.4% of its previous high water mark.
  • GENERAL COMMERCIAL INDEX LED GROWTH IN EQUAL-WEIGHTED INDEX.  Mirroring pricing trends in the broader U.S. composite indices, the General Commercial segment of CCRSI’s Equal-Weighted Index, which reflects sales of smaller, lower-value properties, grew by 13.2% in 2015 and is now within 4% of its prior peak.  The Investment-Grade segment of CCRSI’s Equal-Weighted Index has essentially fully recovered. After gaining 10.4% in 2015, the Investment-Grade Index is within 0.2% of its prior peak level.
  • DOUBLE-DIGIT INCREASES IN FOUR MAIN REGIONAL AND SIX PROPERTY-TYPE INDICES IN 2015 CONFIRM BROAD-BASED RECOVERY. All six major property-type indices, including the land and hospitality indices, along with CCRSI’s four regional indices, posted double-digit gains in 2015, marking the second straight calendar year in the recovery in which all indices increased at double-digit rates.
  • NORTHEAST MULTIFAMILY INDEX WAS BEST-PERFORMING REGIONAL PROPERTY SEGMENT IN 2015. The Northeast Multifamily Index increased 15.4% in 2015 to 44% above its 2007 high. The West Multifamily and West Office Indices also posted exceptionally strong growth during 2015 of 14.8% and 13.9%, respectively, propelling the broader West Regional Index to within 1% of its prior peak.  The South and Midwest Indices grew by 12% and 10%, respectively, in 2015 but both remained 10% or more below their prior peak levels.   
  • DECEMBER TRANSACTION VOLUME CONTRIBUTED TO NEW RECORD HIGH IN 2015. In a repeat of the seasonal pattern witnessed over the last several years, transaction activity spiked in the final month of the year as investors rushed to close property transactions prior to year-end. December composite pair volume of nearly $18 billion was the highest monthly total on record for the CCRSI and helped lift total volume for 2015 to $128.3 billion.  This marked a 26.2% increase from the previous calendar year peak reached in 2014.

Monthly CCRSI Results, Data Through December 2015

 1 Month
1 Quarter
1 Year
Trough to
Value-Weighted U.S. Composite Index 0.6%   2.4%   12.5%  89.9%1
Equal-Weighted U.S. Composite Index 0.7% 2.5% 12.6%51.1%2
U.S. Investment-Grade Index 0.6% 2.5% 10.4%65.4%3
U.S. General Commercial Index 0.7% 2.6% 13.2%50.2%4
1 Trough Date: January 2010  2 Trough Date: March 2011  3 Trough Date: March 2010  4 Trough Date: March 2011

Quarterly CCRSI Property-Type Results

  • STEADY PRICING GAINS SEEN ACROSS ALL SIX PROPERTY SECTORS. In addition, CCRSI’s Prime Markets Indices generally increased more rapidly than the overall property-type indices in 2015, suggesting that core markets remained attractive even as investors demonstrate an increased appetite for risk in secondary and tertiary markets as broader market fundamentals improve.
  • U.S. MULTIFAMILY INDEX SURGED UPWARD BY 13.7% IN 2015. By far the strongest annual rate among the six major property sectors, CCRSI’s Multifamily Index remains the only U.S. property index to have surpassed its prerecession peak, ending 2015 18.8% above its previous high in 2007. The Prime Multifamily Metros Index, which surpassed its previous peak in June 2013, has skyrocketed to 41.4% above 2007 levels. Despite unprecedented levels of new supply, multifamily market fundamentals remained healthy in 2015, with nationwide vacancy rates holding below 4% in the fourth quarter of 2015 and continued price appreciation.   
  • U.S. OFFICE INDEX SEES PRICE GROWTH OF 12.2% IN 2015. Second only to the U.S. Multifamily Index, the U.S. Office Index also saw a double-digit increase in 2015. Pricing in the Prime Office Metros Index advanced by an even stronger 14.8% in 2015 as investor interest remained especially robust across primary markets. U.S. Office market fundamentals also saw significant improvement in 2015 as vacancies decreased to 10.8% from 11.3% in 2014. Despite a moderate pickup in new development, net absorption grew even more strongly in 2015, finally topping 100 million square feet for the first time in the recovery, and marking a 10% increase in office net absorption over 2014 levels.
  • U.S. RETAIL INDEX ROSE 11% IN 2015, WITHIN 0.3% OF PRERECESSION PEAK. Although U.S. retail market fundamentals remained strong with retail vacancies falling to a new historical low of 5.8% in the fourth quarter of 2015, the slow pace of development has been the key component in the recovery of this pricing index. The relatively small amount of newly built retail space has allowed vacancies to compress across all markets despite absorption levels that would be considered tepid by past-cycle standards. While pricing gains have aggregated in the core coastal markets, the Prime Retail Metros Index exceeded its prior peak by 15.8% in the fourth quarter of 2015, despite a lower growth rate of 6.6% in 2015.
  • DESPITE POSTING A 10% ANNUAL GAIN IN 2015, U.S. INDUSTRIAL INDEX ADVANCED AT SLOWEST RATE OF ALL PROPERTY-TYPE INDICES. Market fundamentals for industrial property remained exceptionally healthy, with annual absorption of more than 200 million square feet in 2015, the strongest yet in the recovery. This contributed to a decline in industrial vacancies from 6.5% in 2014 to 5.9% in 2015. Core markets remained in favor with investors as the Prime Industrial Metros Index advanced by 11.9% in 2015.
  • U.S. HOSPITALITY INDEX INCREASED 12.9% IN 2015. After posting a record annual gain of 18.8% in 2014, the U.S. Hospitality Index continued to increase in 2015 but at a slower rate. National hotel occupancies have reached their highest level since the mid-1990s, fueling room rate and RevPAR growth as well as investor demand. While the Hospitality Index suffered the largest peak-to-trough decline of the last cycle — plunging 44.2% — it has moved to within 8.6% of its prerecession peak.
  • LAND INDEX GAINED 11.5% IN 2015. driven by strong demand for development sites across all property sectors, the CCRSI Land Index posted a double-digit increase in 2015. Despite recent gains, the Land Index did not reach its trough for the current cycle until 2012, and it remains 16.3% below its peak in the last cycle.    

Quarterly CCRSI Regional Results

  • NORTHEAST COMPOSITE INDEX WAS FASTEST-GROWING REGIONAL INDEX IN 2015. Thanks to its strong concentration of top-tier markets that have been a magnet for real estate investment since early in the cycle, the Northeast Composite Index advanced 14% in 2015 and is now 14.9% above its prerecession peak. All four property-type indices within the Northeast Region surpassed their prerecession peaks as of the fourth quarter of 2015. The Northeast Multifamily and Retail Indices led pricing growth in the region in 2015 and have soared past their prior peak pricing levels by 44% and 24.9%, respectively, while double-digit growth in the Northeast Office and Industrial Indices in 2015 propelled those indices to 3.5% and 5.8%, respectively, above their prerecession peak levels. 

  • GROWTH OF 11.7% IN 2015 PROPELLED WEST COMPOSITE INDEX TO WITHIN 1% OF PREVIOUS PEAK. The West Multifamily Index increased 14.8% and the West Office Index increased 13.9% in 2015 — the second- and third-strongest growth rates among all 16 regional property-type indices in 2015 — behind only the Northeast Multifamily Index. Such exceptional price growth was driven by exceptionally strong leasing in tech-driven markets, including San Francisco and San Jose, which led all other U.S. markets in office rent growth in 2015.  Office rents increased by over 10% in 2015 in both metros.

  • SOUTH COMPOSITE INDEX INCREASED 12.2% IN 2015. Similar to pricing trends in the West, the Office and Multifamily indices for the South Region led all other property types in that region during 2015, expanding 13.0% and 12.6%, respectively, in 2015. The South Multifamily Index growth has been particularly strong, surpassing its prerecession peak by 4.2% in 2015, the only property-type index in the region to do so. This was despite having the steepest peak-to-trough decline (43.5%) of any property type in the region during the downturn. 

  • MIDWEST COMPOSITE INDEX TURNED IN THE SLOWEST GROWTH AMONG THE FOUR U.S. REGIONS IN 2015. Price growth in the Midwest Region has lagged during the entire recovery—the Midwest Office, Industrial, and Retail Indices did not reach a trough until 2012, nearly two years later than the Northeast or West regions began their recoveries. However, the Midwest Composite Index still posted solid growth of 10% in 2015 and has climbed to within 14.8% of its prior peak level. In addition, the Midwest Industrial Index expanded by 11% in 2015, the fastest rate of any of the four regional property-type indices within the Midwest Region, while growth in the Midwest Retail and Midwest Multifamily indices remained in the single digits in 2015.

About the CoStar Commercial Repeat-Sale Indices

The CoStar Commercial Repeat-Sale Indices (CCRSI) is the most comprehensive and accurate measure 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 we report monthly, we report quarterly on 30 sub-indices in the CoStar index family. The sub-indices include breakdowns by property sector (office, industrial, retail, multifamily, hospitality, and land), by region of the country (Northeast, South, Midwest, 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 one time, 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 of the sales pairs are used to create a price index.

More charts accompanying this release are available at 

For more information about the CCRSI Indices, including the full accompanying data set and research methodology, legal notices and disclaimer, please visit

About CoStar Group, Inc.

CoStar Group, Inc. (CSGP) is the leading provider of commercial real estate information, analytics and online marketplaces. 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. LoopNet is the most heavily trafficked commercial real estate marketplace online with more than 10.0 million registered members., and currently 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. Through an exclusive partnership with Move, a subsidiary of News Corp (NWS) (NWSA) (NWS) (ASX:NWSLV), is the exclusive provider of apartment community listings across Move’s family of websites, which include®, and CoStar Group operates websites with over 23.7 million unique monthly visitors in aggregate as of September 2015. Headquartered in Washington, DC, CoStar maintains offices throughout the U.S. and in Europe and Toronto with a staff of approximately 2,850 worldwide, including the industry’s largest professional research organization. For more information, visit                                                                                                                         

This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations, beliefs, intentions or strategies regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences:  the risk that the trends represented or implied by the indices will not continue or produce the results suggested by such trends, including the seasonal pattern of spiked transaction activity in the final month of the year, growth rates, and healthy and improving market fundamentals; and the risk that investor risk tolerance, investor demand, market supply, vacancy rates, absorption and commercial real estate pricing levels will not continue at the levels or with the trends indicated in this release.  More information about potential factors that could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to, those stated in CoStar's filings from time to time with the Securities and Exchange Commission, including in CoStar's Annual Report on Form 10-K for the year ended December 31, 2014, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, each of which is filed with the SEC, including in the "Risk Factors" section of those filings, as well as the company's other filings with the SEC available at the SEC's website ( All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update such statements, whether as a result of new information, future events or otherwise.



CCRSI Release -- December 2015 (b) CCRSI Release -- December 2015 (a)

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