Commercial property values up again in March

The commercial-property markets continue to firm up: The Green Street Advisors Commercial Property Price Index rose by 2% in March, continuing a trend of higher values since prices bottomed in May 2009. Property values have now risen by almost 15% since hitting their lows in May 2009, according to Green Street Advisors Inc., but values are still off about 30% from their late 2007 peak. “Pricing has been firming since the middle of '09, especially in the last six months," Mike Kirby, Green Street's director of research, said in a release. "Sellers are feeling less pressure to act, the outlook for fundamentals has become clearer, well-capitalized buyers are becoming plentiful, and return requirements across capital markets have come down," he said. The independent REIT research firm claims that its index is more timely than other gauges of the commercial-property market. Green Street's index tracks high-quality properties valued at more than $300 billion, estimating private-market values of properties held by REITs. The firm also incorporates information from brokers, REIT executives and market participants, and uses data from closed transactions as well. And in another sign that the hard-hit property sector may be recovering, apartment rents rose 0.3% during the first quarter, the first gain in five quarters, according to a separate report from Reis Inc., a real estate research firm.