While commercial property prices climbed in almost all parts of the country in the second quarter, the West secured its place as the region with the strongest price growth, CoStar data shows.
The West’s lead in price growth across commercial property types widened over the Northeast in both small markets where more deals occur and large gateway cities where there are fewer sales. The West first edged out the Northeast as the strongest region around the onset of the pandemic, taking a title the Northeast had held for most quarters going back to 2006.
The prices are reflected in both methods the CoStar Commercial Repeat Sales Indices use to measure differences in more than one sale of the same property.
The first chart above shows the price growth in the West leading the Northeast using an equal-weighted method, where a $50 million property sale carries the same weight as a $1 million sale. The West has held the top spot in the equal-weighted index across all markets for the past three quarters.
The second chart above shows the West's price growth leading the Northeast in a value-weighted method, where a $50 million property sale is weighted to be 50 times more important than a $1 million sale.
Deals more heavily influenced by value-weighted trades, common in major Northeast cities such as New York and Boston, have been falling since the end of 2021, according to the CoStar indices, with a 1.9% drop in the second quarter. That was an improvement, though, from the first quarter, when prices fell 6.8%.