Second Street's Q3 Indexes

Recovery Leveling Out

October 5, 2011

The real estate recovery that has brought prices in the commercial sector up from their 2009 low point has begun to level. The recovery was weak in 2010 in the industrial market in any case. In the office sector, the recovery began later than it did in the apartment and retail sectors. Whether it will continue on an upward trend or level will be seen in coming quarters. In the retail sector, the recovery began earlier and continued strongly through 2010. (Second Street's retail index focuses on properties that have been able to maintain high levels of occupancy; for properties in high-vacancy locations, the index trends are less applicable.) This year, 2011, has seen a change for the retail market, with prices trending toward a plateau. The plateau is below the level of the 2006-2007 peak. Of the four sectors, the apartment sector remains the strongest. Prices in the apartment sector have continued their upward trend. But, as in the retail market, the trend is weaker than it was in 2010.

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