Commercial real estate investors in California may follow the Ten-X Commercial Real Estate Nowcast. it is a pricing index that forecasts trends in commercial real estate prices using real time data from investor surveys, proprietary transaction data and Google Trends data. According to its April report, commercial real estate valuations around the country went up by 7 percent from April 2015 to April 2016.
In addition to the year-over-year data, Ten-X reported that there was a 0.6 percent increase in commercial real estate valuations from March to April. The increase also brought commercial real estate valuations above the level that was seen at the end of 2015. All major sectors except hotels saw an increase in commercial real estate valuation in April.
The chief economist for Ten-X said that the growth in April was stronger than the previous month, but the annual growth rate for pricing is still the slowest it has ever been for the cycle. The strongest pricing growth was found in the apartment sector, where valuations went up by 1.8 percent in April. Valuations for hotels declined by 1 percent in April, making April the sixth month in a row that hotel valuations have gone down.
Investing in commercial real estate can be highly profitable when an investor purchases the right property at the right time. Because a real estate purchase requires a great deal of capital, a mistake that is made during the transaction can have lasting financial consequences. An attorney can be of assistance in reviewing a potential transaction for issues such as zoning or tenant disagreements that could prove to be troublesome.