Commercial Real Estate on the Move

ULI: Consensus of Economists Sees Promising CRE Outlook Through 2014

CMBS, Investment Transaction Volume Likely To Jump Sharply As Economy Gains Steam

By Randyl Drummer

March 28, 2012

Even among the stream of positive real estate surveys and forecasts recently, the one issued this week by the Urban Land Institute (ULI) stands out. Expressing the consensus views of 38 leading real estate economists and analysts from across the U.S., ULI reported commercial real estate market conditions and the overall economy is expected to see broad improvement over at least the next two years as the recovery cycle kicks into overdrive and shifts into growth mode.

In other key highlights. the ULI forecast expects CRE transaction volume to increase by nearly 50% over the next three years, while issuance of commercial mortgage-backed securities (CMBS) is expected to more than double. Institutional real estate and real estate investment trusts (REITs) are expected to provide returns ranging from 8.5% to 11% annually through 2014.

Hans Nordby, managing director, and Shaw Lupton, senior real estate economist, for CoStar Group's forecasting and analytics company, Property and Portfolio Research (PPR), were among those consulted on the forecast, which generally dovetail with PPR's baseline forecast for the recovering market over the next three years.

The general theme during a ULI webinar presenting the findings on Wednesday was one of growing confidence that, as ULI Chief Executive Officer Patrick L. Phillips put it, "The U.S. real estate economy has weathered the brunt of the recent financial storm and is poised for significant improvement over the next three years. These results hold much promise for the real estate industry."

According to the consensus, vacancy rates are expected to drop in a range of between 1.2 and 3.7 percentage points for office, retail, and industrial properties and remain stable at low levels for apartments, with rising occupancy also expected for hotels. Rents are expected to increase across the board this year at rates ranging from 0.8% for retail up to 5% for apartments.

On the residential side, housing starts are projected to nearly double by 2014, and home prices will begin to rise in 2013, with prices increasing by 3.5% in 2014.

Although the findings came with a message of caution that geopolitical and global economic events could alter the forecasted growth trajectory, the strong projections are based on a promising outlook for the U.S. economy, with surveyed economists expecting real gross domestic product (GDP) to rise steadily from 2.5% this year to 3.2% in 2014, and unemployment falling to 6.9% by 2014. The heating economy will likely lead to higher inflation and interest rates, raising the cost of borrowing for consumers and investors, however.

ULI conducted the survey, a consensus view that reflects the median forecast for 26 economic indicators, in late February and early March. Comparisons are made on a year-over-year basis from 2009 during the recession through 2014.


U.S. Retail Sales Rose in Feb. by Most in 5 Mos.

By Shobhana Chandra - Mar 13, 2012 3:23 PM CT

Americans heartened by an improving labor market boosted spending at stores and malls by the most in five months, adding to signs that the world’s largest economy is gaining strength.

The 1.1 percent advance followed a 0.6 percent increase in January that was larger than previously estimated, according to Commerce Department data issued today in Washington. Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based.

Stocks and bond yields rose as the report indicated that the best six-month streak of employment growth since 2006 is bolstering spending even as gasoline costs rise. Job gains have not been large enough to satisfy Federal Reserve officials, who today reaffirmed a commitment to keep interest rates low.

Consumers are “unfazed by higher gas prices,” said Jonathan Basile, an economist at Credit Suisse in New York, who correctly forecast the increase in spending. “This is a pleasant surprise on the overall picture for the economy. For the Fed, it’s steady as she goes. They will be encouraged, but there is still a long way to go.”

The Standard & Poor’s 500 Index (SXP) climbed 1.8 percent to 1,395.96 at the 4 p.m. close in New York. The yield on the 10- year Treasury note increased to 2.13 percent from 2.03 percent late yesterday.

The gain in sales last month matched the median forecast in a Bloomberg News survey of economists. Estimates ranged from gains of 0.5 percent to 2.1 percent. The Commerce Department revised the January increase from a previously reported 0.4 percent advance.

Gap, Target

Sales at chains like Gap Inc. (GPS) and Target Corp. (TGT) last month beat analysts’ estimates. Williams-Sonoma Inc., the biggest U.S. gourmet-cookware chain, said demand improved at the start of the year following the holiday shopping season.

“Post holiday, we saw a progressively stronger retail environment,” Laura Alber, chief executive officer of the San Francisco-based company, said on a March 8 conference call. The company reported record earnings for 2011.

Sales increased 1.6 percent at automobile dealers, reversing the prior month’s drop, today’s report showed. The results fell short of industry figures that showed an even bigger gain.

Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. (GM) Light-vehicle sales accelerated 6.4 percent from January to a 15 (SAARTOTL) million annual rate, the strongest since February 2008, according to Ward’s Automotive Group.

‘Pent-Up Demand’

“There are a number of factors that are helping release this pent-up demand,” Don Johnson, vice president of GM’s U.S. sales, said on a March 1 conference call with analysts. “They include stronger employment, good credit availability, and both of those are leading to improving consumer sentiment.”

Automobile stockpiles jumped by the most in more than a year in January, leading a 0.7 percent increase in business inventories, the Commerce Department said in a separate report today.

Retail sales excluding autos increased 0.9 percent in February, exceeding the median forecast of economists surveyed that called for a 0.7 percent gain.

The sales data, which aren’t adjusted for inflation, reflected a 3.3 percent jump in receipts at service stations, the biggest gain in almost a year, as gasoline costs climbed. Regular (3AGSREG) fuel in February averaged $3.56 a gallon, or 18 cents more than January, according to AAA, the nation’s biggest auto organization. It advanced further this month, reaching $3.81 on March 12, the highest since May.

Clothing Stores

Purchases at clothing stores rose 1.8 percent, the most since November 2010. Furniture and general merchandise stores were the only categories to show a decrease in demand.

Employment and income gains are giving consumers the confidence to spend more. The Bloomberg Consumer Comfort Index rose to an almost four-year high in the week ended March 4.

Employers boosted payrolls more than forecast in February. The 227,000 increase followed a revised 284,000 gain in January that was bigger than first estimated, the Labor Department reported on March 9. The jobless rate held at a three-year low of 8.3 percent.

Job openings were little changed in January, capping the best back-to-back months since mid 2008, a signal businesses remain confident about the economic expansion, other figures from the Labor Department showed today. The number of positions waiting to be filled totaled 3.46 million, down from a revised 3.54 million in December that was higher than previously estimated.

Pay Increases

Worker pay jumped in the last six months of 2011 by the most in almost five years, helping households squirrel away some extra cash. Americans saved 4.5 percent of their after-tax income in the fourth quarter, up from a prior estimate of 3.7 percent, according to Commerce Department data.

Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York and a former Fed researcher who specialized in consumer spending, projects Americans will boost purchases at a 3 percent annual rate in the second half of the year after a 2.5 percent gain in the first six months.

Investors have driven up retailers’ shares as the job market heals. The Standard & Poor’s Supercomposite Retailing Index, which includes Gap and Macy’s Inc., has climbed 15 percent this year through yesterday.

GDP Calculation

Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, retail sales rose 0.5 percent in February after a 1 percent increase in the previous month.

Fed policy makers reiterated a plan to keep interest rates low at least through late 2014 after meeting today. Chairman Ben S. Bernanke, in his semiannual monetary policy report to Congress, said maintaining monetary stimulus is warranted even with employment gains and a lower jobless rate.

While there are “some positive developments in the labor market,” Bernanke told lawmakers on March 1, “the pace of expansion has been uneven.” The rise in gasoline prices “is likely to push up inflation temporarily while reducing consumers’ purchasing power,” he said.

He who hesitates is lost

Landlords Poised to Regain Upper Hand In Recovering Office Market

2011 Sees Office Leasing, Sales and Pricing Improve Amid Growth In Office Jobs and Rising Tenant Demand. Outlook Has Landlords Preparing To Sing: "Our Day Will Come"

Office space absorption doubled during 2011 as the office-using job base expanded and vacancies declined across nearly two-thirds of U.S. submarkets, CoStar Group reported this week in its Year-End 2011 Office Review & Outlook. The report presented to CoStar clients found that positive momentum in office fundamentals and the continued absence of new construction is expected to result in higher rents for building owners over the next few years.

Office sales increased steadily through 2011 over the previous year as investors sought to get ahead of the curve, with investor interest spreading beyond the safer well-leased investment-grade buildings in top-tier markets and into smaller properties and second-tier markets such as Seattle, Atlanta and Northern New Jersey. Total fourth-quarter 2011 office sales are likely to match or exceed fourth-quarter 2010’s impressive $25 billion once all sales are tallied.

Total CRE sales, which evened out in 2011 across all property types, is estimated at nearly $300 billion, the highest since the peak of the real estate boom in 2007, and well above the historical average of around $220 billion since 2000.

Although office tenants continue to hold the cards in many markets CoStar reports the outlook appears to increasingly favor building owners in coming years as the cycle continues.

"To sum it up, for the office market, we’re just now getting started. Now is a good time to be an office investor," said Walter Page, director of research for Property and Portfolio Research (PPR), CoStar’s analytics and forecasting division. "We expect vacancy to continue to decline through 2015, and when you have declining vacancy rates, you can raise rents, returns are better, and for an investor, that’s good news."

Economy Shows Positive Signs For CRE

CoStar Group founder and CEO Andrew Florance noted that, although overall employment growth has been anemic, the U.S. posted a solid 1.7% gain in office-using jobs, led by technology and energy markets such as Seattle, Boston, San Francisco and Dallas.

Other positive signs abound, including a leveling off in the loss of manufacturing jobs and a bottoming of the housing market, which should be less of a drag on the economy going forward, and likely to be the source for new jobs as replacement demand for single-family and apartment housing fuels expected construction demand.

Meanwhile, corporate profits are off the charts, from $800 billion in 2000 to $2 trillion in 2011.

"Coupled with low interest rates, companies are in a position to invest aggressively in new facilities and equipment. From a CRE perspective, Corporate America is well positioned to invest in their businesses, plant facilities and equipment," Florance added.

Challenges remain, including relatively weak consumer confidence, continued high unemployment, a record federal budget deficit and economic upheaval in Europe. Occupancy recovery varies widely between metros, with "have" markets such as supply-constrained New York City showing 7.4% vacancy and housing bust "have-nots" like Phoenix lingering at a stubbornly high 20.7%.

However, CRE values have recovered to roughly 2000-year levels, and vacancies declined across the country last year. In a strong indicator of an impending office rebound, vacancy rates declined in 63% of the 2,400 office submarkets tracked by CoStar. That’s the strongest number since 2004-05, which roughly marked the beginning of the last CRE up cycle.

In the fourth quarter, CoStar recorded 18 million feet of net absorption, which drives occupancy rates and other leasing fundamentals, and a total of 49 million square feet for the year, doubling 2010’s absorption.

Despite rising concerns about the darkening economic picture that started last spring and continued through the year, absorption rose sharply in the second half of 2011, said Page, noting that companies are leasing space "and smaller tenants, the lifeblood of the office sector, are back."

Jay Spivey, CoStar senior director of research and analytics, said that the office recovery, while not feeling very strong so far for many landlords and investors, is actually much stronger than the recovery in the office market following the collapse of Internet companies and real estate downturn 10 years.

"We have seven quarters of positive growth, and at that same point 10 years ago, we were still seeing negative absorption," Spivey said.

Concessions Starting to Disappear

With improving occupancy and little new supply, concessions like free rent and tenant improvements are burning off in some markets and overall, the long downward slide in average office rents has likely bottomed.

CoStar sees significant upside in office rents, which are currently 11% below their long-term trend, Page said. With office construction at an all-time low, rents will rise and are expected to reach their long-term average between 2015 and 2017.

The analysts singled out "premier" suburban areas located near the urban core in markets such as Bethesda, MD, and West Los Angeles are seeing net absorption recover much more quickly on a rolling annual average compared with CBDs or outer suburban areas. Likewise, a survey of four- and five-star buildings in CoStar’s new Building Rating System, the equivalent of the top Class A properties, shows that the best buildings are absorbing most of the space. One- and two-star buildings, typically Class C, were hammered during the recession and are recovering more slowly.

While national vacancy and availability rates are both trending down, there are vast differences within metros and within the CBD and suburban properties in those markets. In Miami, for example, the CBD vacancy rate is about 22%, while suburban and premier suburban rates are lower. By contrast, Atlanta’s Buckhead premier office suburb, where much new construction came on line as the recession hit, has the highest vacancy at over 20%, more than 6 percentage point higher than the Atlanta CBD.

Investors Explore Secondary, Suburban Markets for Deals

The return of portfolio sales outside the largest markets in 2011 shows that investors, who largely retreated to the safety of well-leased properties in safe core markets like Washington and New York over the last couple of years, are ready to assume risk in certain transactions, with the help of a slowly returning flow of debt financing.

Distressed sales volume as a percentage of total office sale transactions fell during 2011. As distress has abated, prices have begun to rise over the last couple of quarters, spreading from investment-grade properties to smaller general commercial sales, according to the CoStar Commercial Repeat Sale Index (CCRSI).

Pricing has risen in most markets and is approaching replacement cost for some buildings, Spivey noted. Higher occupancy buildings are fetching a higher price premium currently than in 2007, possibly opening a window for investors on opportunities in select vacancy challenged properties.




Moving your office? Here is a timeline and some tips.

WHAT AND HOW LONG IS THE RELOCATION PROCESS

TIMELINE

YOU SHOULD BEGIN RELOCATION EFFORTS 4 TO 6 MONTHS BEFORE THE MOVE DATE

WEEK 1

DEFINE YOUR REQUIREMENTS FOR A NEW LOCATION. THIS INCLUDES MEETING WITH MANAGERS AND DEPARTMENT HEADS. TAKING TIME UPFRONT TO DETERMINE A CLEAR CONCISE PICTURE OF WHAT YOU ARE LOOKING FOR WILL SAVE LOTS OF TIME IN THE FUTURE

WEEK 2

BEGIN INSPECTION TOURS OF THE MOST QUALIFIED PROPERTIES

CONDUCT PRELIMINARY SPACE PLANNING IF NEEDED.

WEEKS 3-4

MAP OUT YOUR NEGOTIATION STRATEGY. PRIORITIZE WHAT MATTERS MOST TO YOU. ( RENT REBATE, TENNANT IMPROVEMENT ALLOWANCE, PRIORITY PARKING SPACES, BASE RENT CONCESSIONS, TERM, ANNUAL RENT ADJUSTMENTS, EARLY TERMINATION ALLOWANCE, GUARANTEES, SECURITY DEPOSITS ETC.)

OPEN NEGOTIATIONS WITH A LETTER OF INTENT

RESPOND TO COUNTER OFFERS

WORK WITH SPACE PLANNERS

EVALUATE VARIOUS OFFERS

WEEKS 5-6

UPON ACCEPTANCE OF THE LETTER OF INTENT. ATTORNEYS TO NEGOTIATE THE LEASE

WEEK7

LEASE SIGNING

AT THIS TIME WORKING DRAWINGS FOR TENANT IMPROVEMENTS BASED ON THE SPACE PLAN CAN BE UNDETAKEN. (UNTIL THE LEASE IS SIGNED THE LANDLORD WILL MOST LIKELY NOT BE WILLING TO COMMIT HIS CAPITAL TO A PROJECT THAT MAY OR MAY NOT HAPPEN)

WEEKS 8-24

PLANS AND PERMITS CAN TAKE FROM 2 – 6 WEEKS, DEPENDING ON THE VARIOUS APPROVALS REQUUIRED.

DEPENDING ON HOW MUCH BUILD OUT IS REQUIRED, TENANT IMPROVEMENTS COULD TAKE FROM 8 – 12 WEEKS TO CONSTRUCT.

LIST OF PLAYERS INVOLVED IN A MOVE

YOU NEED A GOOD TEAM TO ASSURE A SMOOTH RELOCATION PROCESS.

1. COMMERCIAL REAL ESTATE BROKER REPRESENTING YOUR INTERESTS

2. ATTORNEY

3.ARCHITECT/SPACE PLANNER (OFTEN FURNISHED BY LANDLORD)

4.TELECOM

5. I. T.

6. MOVING COMPANY

7. OFFICE FURNITURE

8.GENERAL CONTRACTOR (SOMETIMES FURNISHED BY LANDLORD)

9. BANK (IF PURCHASING)

10 BUILDING INSPECTOR (IN SOME INSTANCES)

Biggest Suburban Lease Signed Since 2010

Acco Brands to move in biggest suburban lease since 2010

By: Ryan Ori January 11, 2012

(Crain's) — In the largest suburban office lease in more than a year, Acco Brands Corp. is moving its headquarters to a 189,092-square-foot office building at Kemper Lakes Business Center in Long Grove.

Acco Brands says it will occupy all of the three-story, Class A building, a 10% increase from its current space. It currently occupies 170,139 square feet at 300 Tower Parkway in north suburban Lincolnshire.

The move to 4 Corporate Drive in the northwest suburb is another boost to the Lake County submarket, which is awash in office space but has experienced a recent rally of sorts.

The submarket had an area-worst 28.1% vacancy rate to end 2011, according to Chicago-based Jones Lang LaSalle Inc. But that was down from 29.7% a year earlier, with help from four leases of more than 100,000 square feet in 2011.

Acco Brands, an office and computer products supplier, plans to move into its new building in March 2013, a company spokesman says. It has about 450 employees in Lincolnshire and 4,000 worldwide.

Terms of the 10-year lease were not disclosed. It was the largest suburban lease since third-quarter 2010 and the largest relocation since first-quarter 2010.

“Big deals are getting done in the suburbs, and there are a lot still in the pipeline,” says Dan McCarthy, a Jones Lang LaSalle senior vice-president who represented pharmacy benefits manager Catalyst Rx in a 106,000-square-foot lease in Bannockburn in the fall. “The large corporations that have the ability to make a commitment right now are locking in some great deals.

“It's the small and mid-size spaces that aren't being absorbed. That's going to have to change for the market to get healthy.”

The headquarters move is not connected to Acco's pending acquisition of packing company MeadWestvaco Corp.'s office supplies business, the Acco spokesman says. Most MeadWestvaco employees in that deal are expected to continue working in Kettering, Ohio, he says.

Acco's move would provide enough extra space to take on additional employees if needed, the spokesman says. The headquarters has executives and employees in sales, marketing, purchasing, sourcing, human relations, legal and corporate communications, he says.

The new building will include engineering and product innovation labs. The Kemper Lakes complex's amenities include a 600-seat auditorium, fitness center, day care and cafeteria. The office buildings are alongside a golf course.

“We're excited about the opportunity to provide our people with a working environment that offers state-of-the-art amenities and the ability to accommodate future business growth,” Acco President Boris Elisman says in a statement. “Our employees will be involved in every stage of the design of our office space, ensuring that we create the ideal environment for collaboration and product innovation.”

The Kemper Lakes campus has four buildings with a combined 1.1 million square feet. Philadelphia-based BPG Properties Ltd. bought it for $30.6 million in 2005, when it was 20% leased, and has done about $35 million in renovation work, says Chicago-based BPG senior vice-president Joseph Neverauskas says.

Kemper Lakes is 62% occupied and will be about 80% leased when Acco moves in, and no leases will expire before then, Mr. Neverauskas says. Two tenants will be moved from the building Acco will occupy to other space in the complex, Mr. Neverauskas says.

“Over the past few years activity has been pretty slow,” Mr. Neverauskas says. “The Chicago suburbs have been stagnant during this recession we've just had.

“I think the market is improving, but until the economy picks up and employment starts to grow, it's still a bumpy road. The key is to have quality product with great amenities.”

Acco was represented by Lou Hall, an executive director in the Chicago office of Cushman & Wakefield Inc., which also manages the office campus.

BPG was represented by Principal Steve Kling and Senior Vice-president David Florent of Colliers International.

Acco makes a range of office supplies such as planners, laminating equipment, shredders, power adapters, staplers, binders, dry-erase boards and audio-visual equipment. The company markets products in more than 100 countries under names including Swingline, Day-Timer, Kensington, Wilson Jones, Rexel, NOBO and Quartet.

Thank you

It is hard to believe that another year has come and gone. Both Jim and I here at Chicago Commercial Realty Brokerage, THE CCRB, want to thank you for all your support. Whether that support came in the form of a transaction we did together, a referral you gave us or just a friendly conversation, we thank you. Everyone here at THE CCRB wishes you health, happiness and prosperity for the New Year.

Happy New Year.

Gradual Improvement

CRE Pricing Recovery Continues With September Rebound

Third-Quarter CoStar Sales Data Reflects Less Distress, Firmer Retail Pricing and Broadening Strength Across the Spectrum of CRE Properties

By Randyl Drummer

November 16, 2011

Commercial Real Estate prices resumed their steady if modest rise in September following a pause the previous month, helping lift the CoStar National Composite Index to a nearly 1% gain in pricing for the third quarter of 2011 over the previous three months.

Two main factors, the ongoing decline in distressed sales activity and the recovery in pricing of retail and multifamily sales -- drove the 0.9% increase for the quarter and the modest 0.4% bump, according to the latest release of the CoStar Commercial Repeat Sale Index (CCRSI).

CoStar counted 825 sales pairs for September, 682 general property purchases and 143 investment grade deals, in slightly lower transaction activity from the previous month. By comparison, only 385 transactions were recorded in January 2009, the bottom of the last downturn, and the September figure is within the historical range of the real estate boom period from 2004 to 2008.

Total deal dollar volume declined slightly in September by 1.2% from its six-month average, chiefly reflected in the general property index, which fell 5.9%, while investment grade volume remained at about par with its six-month average.

Distress sales accounted for 25% of repeat-sale transactions in September and have declined steadily as a percentage of total sales from a peak of 35.4% in March 2011. While distress sales have drifted down over the past six months, the overall level remains high, suggesting that distress continues to be a significant factor in CRE pricing.

Both the investment-grade and general commercial property indices rose about a half-percentage point in September - further evidence that the pricing bifurcation between high-quality and lesser-quality assets is starting to level out. The fifth consecutive monthly increase pushed the general property index to a 1.6% gain during the third quarter over the prior three months, the second straight quarter of positive price growth. The Investment Grade Index edged down 1.4% in the third quarter, reflecting the August softening in pricing.

Sales of non-distressed property sales posted solid quarterly price increases of 2.3% for general properties and 1.9% for all commercial properties. Distressed property sales continued their gradual decline.

The CCRSI Multifamily Index posted a 2.1% pricing gain following the strong 7.3% increase in the second quarter. The multifamily index has jumped 12.3% and outperformed all the other property indices since bottoming out in the second quarter of 2010.

The Retail Index posted the highest gain, rising an impressive 5% over last quarter. However, retail has a lot of ground to make up and was still 3.9% below the same period last year, and 32.8% below its peak.

"Despite great uncertainties in current economic conditions, the commercial real estate market recovery continued, albeit slowly and at a bumpy pace. The steady and solid recovery of the General Commercial Index also indicated broad interest in commercial real estate among investors," according to the monthly CoStar report.

Still, many challenges remain. While overall U.S. retail and multifamily prices advanced in the third quarter, office and industrial prices retreated, and pricing for everything except apartments continues to oscillate in 2011, with the lack of a clear upward trend reflecting the uneven recovery for those sectors in the volatile economy.

Despite the gradual strengthening in pricing of higher-end properties, the investment-grade repeat sales index remained 35.8% below its August 2007 peak, with the composite and general property indices both down from last year and nearly 34% below their peak.

The Office Index fell by 5.1% in the third quarter after posting a strong 15.5% gain in the previous three months. Office is 38.5% below its second-quarter 2008 peak, the largest decline among the four property types. Similarly, the Industrial Index fell by 3.6% in the third quarter, with prices presently 9.3% below the same period last year and 33.1% below their early 2008 peak.

The latest CCRSI results reflect trends noted by CoStar analysts during the recent round of third-quarter market reviews for the office, industrial, retail and apartment sectors.

"The demand for real estate in terms of capital is returning. There is tremendous pressure on investment managers to place money, principally because real estate looks cheap relative to other asset types," said Walter Page, director of research and office specialist for Property & Portfolio Research (PPR), CoStar’s forecasting and analytics subsidiary, during the third-quarter office review last month.

While continuing to struggle, general property transaction activity is showing some improvement of late. While the office market is seeing the lowest level of pricing among the property types by historical numbers, high-quality assets that have traded at premium prices have fueled recent improvements on that front, said Jay Spivey, CoStar director of analytics.

While still prevalent , distress is not as deep in real estate markets as some had expected. The recent Operation Twist move by the Federal Reserve to lower interest rates may have slowed the momentum of distressed sales by flattening the yield curve for banks, Senior Real Estate Strategist Suzanne Mulvee said during the CoStar’s retail outlook.

The Northeast, which saw the smallest pricing losses during the recession, recorded an increase of 2%, the largest quarterly price increase among the CCRSI’s four regional indices. The Northeast Index was only 19.8% below its peak value at the end of the third quarter. By comparison, pricing was 34.8% below peak value in the South, and down 36.4% and 40.1% in the West and Midwest, respectively.

Further color on the quarterly CCRSI regional results includes the following:

• All property types in the Northeast except retail showed price increases, led by office at 2.1%, multifamily (1.3%) and industrial, barely, at 0.1%. The Northeast retail index declined by 3.34%.

• In the West, the composite index posted a 1.36% quarterly increase, offsetting declines over the same period last year. Retail led all gainers at 10.1%, followed by multifamily at 0.2%. However, a 3.7% decline in office prices wiped out gains made in the region since the third quarter of 2010. The West’s industrial index continued its two-year decline, falling another 1.7% in the third quarter.

• The composite index edged up slightly by 0.5% in the South during the quarter, but is still 2.6% below the same time last year. Price gains were mainly in retail (8.9%) and industrial (6.7%). But a big quarterly decline of 6.4% in office mostly offset those gains.•

• Of the four regions, the Midwest is still waiting for prices to reach bottom, with the Midwest Composite Index declining by another 0.8% in the third quarter and currently 9.8% below the same period last year. Prices for all property types except for office continued to fall in the quarter and overall, the Midwest’s prices are 40.4% below their peak -- the largest decline among the four regions.