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Barometer Shows Strong Year-Over-Year Improvements
Tucker, Michael
Eighty-five percent of key indicators in the Urban Land Institute's Real Estate Barometer report improved compared to a year ago.

"Lows as well as highs were energized this month," said Anita Kramer, vice president of the ULI Center for Capital Markets and Real Estate, Washington, D.C. "Unemployment dropped to an almost four-year low; cap rates stayed near four-year lows but moved enough to suggest a broadening buyer appetite for secondary markets; commercial mortgage-backed securities issuance vaulted to an almost five-year high."

Kramer compared the key indicators' improvement to last October, when only 52 percent of the key indicators had improved from 12 months before.

Commercial property prices remain at or near three-and-a-half-year highs. Prices increased most substantially in the apartment sector. Though real estate investment trust returns fell, one-year returns remained considerable, ULI reported. 

Commercial property transactions "shot up," Kramer said. Sales volume excluding land and hotels rose 21 percent to $16.7 billion in August, close to the long-term average since 2001, Real Capital Analytics, New York, reported. Transactions increased 84 percent in the apartment sector, while the office sector saw slight volume declines. Multifamily permits moved down slightly from their four-year high, while apartment starts increased after a three-month retreat.

The top 10 most active sales markets accounted for 42 percent of all commercial real estate transactions in the past year. Top markets include Manhattan, Los Angeles, Chicago, San Francisco, Dallas, Houston, Boston, Atlanta, Seattle and Washington, D.C.'s Virginia suburbs, RCA reported. 

RCA also reported cap rates rose seven basis point in August to 6.91 percent after July's 6.82 percent cap rate equaled the lowest level since October 2008.