Founders Grove Insights

November 2018 Founders Grove Capital Newsletter

written by Ryan Cox

In October, Founders Grove Capital hosted a commercial real estate technology event with CREtech in Austin at the Capital Factory. I was excited to bring together some of the brightest commercial real estate tech founders, Ryan Turner with RefineRe, Michael Mandel with Compstak, Arie Barendrecht with WiredScore and Doug Shankman with CREXi along with commercial real estate focused venture capitalists, Travis Putnam with Navitas & Elie Finegold with MetaProp to Austin to speak on two separate panels.  I believe that it is vital as an investor to understand the technology that is shaping the future of commercial real estate.   I will continue to develop relationships to understand the evolving technology landscape and the impact to commercial real estate through my podcast, The Real Estate Innovators.

US Prices Rise 0.7% in September, RCA Report Shows

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Prices of U.S. commercial properties increased 0.7% in September from a month earlier, led again by growth in the apartment sector, the latest RCA CPPI report shows. The US National All-Property Index increased 7.2% from a year ago.

Price trends in September continued on the relatively consistent path that has been shown throughout 2018 so far. Growth in national prices is being driven by gains in the Non-Major Metros and there is a wider variation in growth patterns among property types this year compared with 2017.

1810 US CPPI_sectors_72

The apartment sector is the only property type still posting double-digit annual price growth. Apartment prices rose 0.5% in September and are up 10.7% year-over-year. As shown in the latest edition of US Capital Trends, which was also released this week, deal volume in the apartment sector is up 12% for year-to-date 2018 compared with the same period a year ago. Transactions of apartment single assets, considered to be the most telling gauge of market health, set a record for the year to date.

Suburban office prices are up 0.4% in September from August and 8.8% from a year prior. Annual price growth for the suburban office sector has accelerated each month since the start of 2018 as investors move out of more highly-priced downtown areas in search of yield. Single asset sales in the suburban office market are on pace to hit a record high level of deal activity in 2018.