Still, a repeat gauge of sales for August shows that commercial real-estate values fell about 11.3% from peak July 2020 levels, with some sectors down 20%, according to CoStar data.
A Barclays team of analysts led by Lea Overby said current valuations rely on a “thin” data set, given that CoStar data has this year’s transaction volume at only $60 billion so far, putting it on track for the lowest volume year since 2013. They also said negative news could be painting too grim of a picture of the commercial real-estate market.
But broad drops in property prices usually take time to register, since most commercial landlords typically have long-term leases in place with tenants, which serves as a buffer during a crisis. “Looking forward, we expect the recent rapid increase in the 10-year Treasury BX:TMUBMUSD10Y rate to above 4.5% to have further affected transaction volumes in September,” Overby’s team said in a Monday client note.