Mall values move lower in the US commercial property market

Posted On Tuesday, 07 November 2017 16:31 Published by
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The Green Street Commercial Property Price Index declined by 1% in October due to falling mall valuations

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The index, which measures values across five major property sectors, was pushed down by falling mall valuations.  Prices for most other property types were stable. 

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 “In aggregate, prices have plateaued, but it’s really a mixed bag when it comes to property pricing these days,” said Peter Rothemund, Senior Analyst at Green Street Advisors. 

“Industrial, medical office, life science – they’ve all done great over the past year.  Malls have been weak.  And everything else has been somewhere in between.

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Green Street Commercial Property Price Index Fact Sheet

Green Street’s Commercial Property Price Index is a time series of unleveraged U.S. commercial property values that captures the prices at which commercial real estate transactions are currently being negotiated and contracted.  Features that differentiate this index are its timeliness, its emphasis on high-quality properties, and its ability to capture changes in the aggregate value of the commercial property sector.

Key Attributes of Green Street's Commercial Property Price Index

• Institutional Quality: The index is based on Green Street's frequently updated estimates of privatemarket value for REIT portfolios across the five major property sectors (apartment, industrial, mall, office & strip retail – aggregate asset value of $600 BN).  Since REITs own high-quality properties, the index measures the value of institutional-quality commercial real estate.

• Timeliness: Other indices, based on either closed transactions or formal appraisals, reflect market prices from several months earlier.  Also, the Green Street index value for a given month is released within days of month-end, whereas other indices have a sizable lag. 

• Gauge of Aggregate Values: Akin to familiar stock price indices (e.g., S&P 500), asset value weighting provides a gauge of aggregate (as opposed to average) values.  Equal-weighted indices, by contrast, put the same emphasis on a small suburban strip center as they do a trophy Manhattan office building. 

Source: Green Street Commercial

Last modified on Tuesday, 07 November 2017 16:31

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