Commercial Real Estate Prices Are Rising, But Major Cities Continue To Lag Behind

A report from Real Capital Analytics shows that commercial real estate prices are growing, but major cities like London and New York City continue to see delayed recovery.

According to a new Real Capital Analytics (RCA) report, commercial real estate prices have risen around the world, but many central business districts still struggled during the third quarter.

The RCA CPPI composite index revealed that demand for industrial and logistics properties helped boost these prices by 7.2% during the third quarter across major cities including Melbourne and Los Angeles.

However, in places like Chicago, London, New York City, and San Francisco, prices are lower than pre-pandemic levels. This may be driven by continued remote working arrangements in the suburbs.

RCA’s report added that markets that have been seeing negative price growth since late 2019 are among “the most expensive office markets in the world by occupancy costs.”

In Germany, the RCA report found that “instead of a single focal point, its core office investment markets are themselves decentralized, spread out across top-tier cities.”