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CRE Property Prices Fell 3% YoY, Yet Pace is Declining

The MSCI report highlights a 3.0% year-over-year drop in the RCA CPPI National All-Property Index.

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Good morning. MSCI says CRE prices fell 3% YoY with a slowing decline rate. Plus, fashion retailer Express filed for bankruptcy and plans to close more than 100 stores and attempt to save the brand.

Today’s issue is brought to you by Heritage Capital Group. Join the waitlist to invest alongside them in their next industrial acquisition.

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CRE Property Prices Fell 3% Year Over Year

MSCI CRE Property Prices Fell 3% Year Over Year

CRE prices continue their downward trend, falling 3% YoY, although the pace of decline is decelerating, as highlighted in a recent MSCI report.

State of the market: The MSCI report highlights a 3.0% year-over-year drop in the RCA CPPI National All-Property Index, a slight 0.2% decrease from the previous month. This trend showcases a deceleration in the rate of price reductions, particularly bolstered by improvements in the industrial sector.

Sector-specific trends:

  • Industrial: The industrial sector is experiencing a resurgence, with property prices increasing by 0.7% month-over-month, 2.2% over the past three months, and an impressive 5.7% over the past year.

  • Office space: Continues to struggle under the weight of high borrowing costs and market uncertainty, particularly in central business districts, which saw a staggering 33.2% drop over the year.

  • Retail: Retail properties are showing signs of a slight recovery. There was a modest month-over-month increase of 0.1% and a 0.2% rise over three months despite a year-over-year decline of 1.2%.

  • Multifamily: Apartment prices continue to decrease but at a slower rate. The declines were 0.9% from February to March, 2.8% over three months, and 8.4% year-over-year. The rate of decline has slowed each month for the past seven months.


Zoom out: With the Federal Reserve maintaining a cautious approach to interest rate cuts, the high cost of financing continues to suppress any potential uplift in property prices. The greater the need for financing, the higher the costs and the lower the appeal of the property prices, which might need to decrease further to attract more buyers.


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  • Located where Heritage already owns and manages over 1 million square feet of industrial real estate.

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✍️ Editor’s Picks

  • Deal of the day: CoStar Group (CSGP) will acquire Matterport (MTTR) for $1.6B, or $5.50 a share. MTTR soared 181% on the news.

  • Urban revitalization: Detroit's business district sees remarkable revival post-bankruptcy with a 40% jump in home prices and 5,903 apartments added since 2010.

  • Cannabis cash crunch: Legal cannabis sales have sparked investor interest, but complications often lead to lower profitability for landlords and businesses.

  • Inflation's impact: With inflation still higher than expected, the U.S. multifamily market continues to struggle even though lenders are eager for deals.

  • Billion-dollar departure: After 20 years, Tal Savariego leaves Meridian Capital Group, having closed $10B in deals, and joins Iron Hound Management.

  • Housing hurdles: A new proposal in CA to curb institutional investors from buying single-family homes might just worsen the housing crisis since investors own just 2% of CA’s supply.


  • Banking panic: Warbasse Houses, a Coney Island complex, caused a banking panic that led NYCB to report up to a $112M loss in Q4.

  • Open the gates: Interstate Equities Corp. finalized a deal with Clarion Partners, giving it a majority stake in the $45M, 136-unit Gates at Marina.

  • Construction insights: Summit Contracting Group remained the top U.S. apartment builder in 2023 despite slower new business, citing rising costs and a positive outlook for 2024.

  • Sky-high student living: Kennedy Wilson secured a senior construction loan to develop Aspire A&M student housing in College Station, TX, featuring 873 beds.

  • Rent vs. own: Millennials paid less for rent in their 20s compared to Gen Z, with San Jose currently boasting the nation’s highest average rent costs.

  • Building buzz: Kentucky-based real estate trust Flagship Communities unveils its biggest deal since going public nearly four years ago.

🏭 Industrial

  • Texas boom: Ross Perot Jr.’s Hillwood buys a 1MSF Amazon (AMZN) center in Florida, as Forefront Commercial acquires a four-building industrial portfolio near Dallas.

  • Tenant tiptoe: U.S. industrial tenants are showing a very cautious approach, resulting in the slowest pace of leasing since 2012 after record signings in 2021–2022.

  • Tampa rising: Stonemont Financial Group and PCCP are developing a 100.62KSF facility near Tampa Airport with 32-foot clear heights.


  • Design district delight: ASG Equities sells Miami Design District property 70-74 NE 40th St, fully occupied by luxury brands, for $14M.

  • Rethinking living: Legendary landman Rex Glendenning partners with Walmart (WMT) for a Celina project featuring residences, retail, and even trails.

  • Retail resilience: According to Placer.ai's Q1 2024 Retail & Dining Review, nationwide retail visits jumped up by 6.1% YoY in March.


  • Workplace turmoil: WeWork struggles with infighting, missed milestones, and shrinking liquidity, and is facing a potential fire sale to former CEO Adam Neumann for $600–$900M.

  • Trophy trendsetting: Mosler predicts a positive outlook for SF & NYC offices thanks to a recent 5MSF increase in demand for quality spaces and lower vacancies.

  • Another one bites the dust: Manhattan's 225 & 233 Park Ave South, a 675KSF office property, faces an imminent default on a $235M CMBS loan.

  • Bargain bin discounts: Yellowstone: Yellowstone Real Estate acquired a $308M loan on Blackstone's (BX) 1740 Broadway for nearly $200M.


  • Hyatt's advantage: With $3.6B reinvested, Hyatt (H) CEO Hoplamazian values hotel ownership, maintaining a high-end focus and leading in the luxury resort category.

  • Refinancing reflections: Oyo is set to refile a red herring prospectus for a share sale in India due to its refinancing impact, a source reveals.

  • Optimism up: The hotel industry expects stronger performance this year after a tough Q1. And in March, Apple Hospitality REIT (APLE) bought the 234-key AC Hotel in DC for $116.8M.


Express Inc. Declares Bankruptcy, Plans 100 Store Closures

Express files for bankruptcy, plans to close nearly 100 stores as investor group looks to save the brand

Pedestrians walk past an Express Inc. store in New York, U.S. Mark Kauziarich | Bloomberg | Getty Images

Fashion retailer Express Inc. has announced its filing for Chapter 11 bankruptcy protection, leading to the closure of over 100 of its 530 stores.

Financial struggles: Amid declining sales and a mismatch with current fashion trends, Express has struggled to keep pace in a challenging retail environment. The company has secured $35 million in new financing and an additional $49 million cash influx from the IRS under the CARES Act to aid its recovery. These funds are critical as the company looks to restructure its debt-heavy balance sheet, which recently reported $1.3 billion in assets against $1.2 billion in debts.

Interest from possible buyers: A consortium spearheaded by WHP Global, which owns Toys R Us and other fashion brands, has expressed intent to acquire most of Express's retail stores through bankruptcy. The group, holding a 7.4% stake in Express, includes Simon Property Group and Brookfield Properties subsidiaries, as per Reuters.

By the numbers: As part of its restructuring, Express plans to close 95 of its namesake stores and all 12 of its UpWest locations. Despite these closures, 423 stores will remain operational. The brand has experienced a roughly 10% decline in sales since 2019, a drop exacerbated by the pandemic and ongoing financial difficulties. The recent sale of Bonobos' operating assets to Walmart for $25 million further underscores the weaknesses in Express’s core business.


What’s next: Bankruptcy will offer crucial relief to Express, aiding its recovery and strategic turnaround by freeing it from expensive leases in failing malls, thus enhancing its appeal to buyers. The renowned law firm Kirkland & Ellis, known for guiding retailers like Bed Bath & Beyond through bankruptcy, is serving as Express's legal counsel. Additionally, Moelis & Co. is acting as its investment banker, with M3 Partners as its financial advisor.


The pandemic significantly impacted the housing market.

Following the Great Financial Crisis, the rental market had been strained due to years of underdevelopment, coinciding with a surge of Millennials entering peak renting years. This led to a decrease in multifamily vacancy rates from a high of 13.1% in 2009 to 7.0% by 2015. Concurrently, rents increased annually between 2% and 4% from 2012 to 2020.

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