CRE Market Price Growth Remains Healthy Overall Despite Slowing In Some Sectors According To Ten-X Commercial Real Estate Nowcast

Improved Industrial Segment Showing May Be Impacting Performance in Other Sectors

Jan 13, 2016, 13:18 ET from Ten-X

IRVINE and SILICON VALLEY, Calif., Jan. 13, 2016 /PRNewswire/ -- Ten-X (formerly Auction.com), the nation's leading online real estate marketplace, has released its latest – and newly rebranded – Ten-X Commercial Real Estate (CRE) Nowcast which reveals that commercial valuations in December increased 26 basis points from November, a healthy showing despite divergent valuation patterns across the five major commercial sectors.

Four property segments saw valuations increase in December according to the pricing index, which combines Google Trends data, Ten-X's proprietary transaction database and investor surveys to forecast CRE pricing trends in real time. Retail valuations increased 79.5 basis points for the month, apartment increased 72.7 basis points and office increased 17.1. But the most significant gain was seen in the industrial sector, which rose 335.3 basis points, bringing the sector's nowcast level 19.3 percent above its year-ago level and possibly impacting performance in other sectors.

"After lagging the other commercial segments for years, the industrial sector has recently taken off," said Ten-X Chief Economist Peter Muoio, who cited the sector's increasing rents and sharp improvement in vacancies as key contributors to its standout performance. "As perhaps the only commercial property segment to benefit from technology changes through e-retail fulfillment demand, Industrial is getting a lot of attention from investors. Bidding activity has increased for industrial properties offered on our online auction platform and investor sentiment is bullish."

Meanwhile, hotel valuations saw a sharp downturn, dropping 275.3 basis points for the month following a similarly lackluster showing in November. Muoio noted that investors appear to have turned bearish on this particular sector as the strengthening dollar has hurt foreign travel to the U.S. and encouraged Americans to vacation abroad, and as innovations like Airbnb have increased shadow competition.

December Nowcast Results: All price indexes are rebased at 100 from January 2010

Sector

Nowcast Index

Month-Over-Month % Change

Year-Over-Year % Change

Office

169.0

+0.17%

+10.99%

Apartment

181.9

+0.73%

+11.33%

Retail

165.9

+0.80%

+10.95%

Industrial

159.7

+3.35%

+19.31%

Hotel

205.1

-2.75%

+8.82%

All Property Types

176.3

+0.26%

+11.95%

About the Ten-X CRE Nowcast:
The Ten-X CRE Nowcast (formerly the Auction.com CRE Nowcast) is a price index covering the entire U.S. commercial market, including individual price trends for each major market sector– office, apartments, retail, industrial and hotels. It is based on data modeling developed by Google Chief Economist Hal Varian, who defines "nowcasting" as "contemporaneous forecasting" – the ability to predict what is happening as it occurs. Ten-X applies Varian's theories by combining publicly available and anonymous Google Trends data with its own proprietary transactional data to create a model for accurately predicting current commercial real estate activity. This data is supplemented with "real human" input through the company's partnership with Situs and their Real Estate Research Report (RERC). 

Ten-X issues its CRE Nowcast monthly after combining transactional data, related online search activity indicating purchase intent and investor survey results. The company runs multiple versions of the Nowcast model and layers in additional variables every day to improve its accuracy in predicting pricing trends across CRE sectors in key U.S. markets. Future iterations will include regional, local and individual asset-based price indicators. By analyzing current market conditions as opposed to only historical data, Ten-X is able to provide more relevant and timely insight to real estate investors, economists and government entities alike.

About Ten-X

Ten-X (formerly Auction.com) is the nation's leading online real estate marketplace, having sold 200,000+ residential and commercial properties totaling more than $35 billion since 2007. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions entirely online. The company brings a breadth of quality assets to the market, attracting prospective buyers through world-class marketing and leveraging a scalable technology platform to conduct transactions in a transparent, efficient manner. 

Ten-X empowers consumers, investors and real estate professionals around the world with unprecedented levels of flexibility, control and simplicity – and the convenience of transacting properties whenever and from wherever they are. As real estate continues to move online, Ten-X is uniquely positioned to be at the forefront of this dramatic behavioral shift.

Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include Google Capital and Stone Point Capital. For more information, visit Ten-X.com.

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SOURCE Ten-X



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