The metro level data confirmed another strong quarter for commercial real estate in Q1, though with the usual wide range of performance across sectors and cities. For offices, rents in the larger coastal markets continued to trail for the most part, while life sciences in Boston and San Diego helped lift their performance to the top of the rankings. Sunbelt markets were the strongest for apartments, as the recent rental growth in major metros such as NYC cooled somewhat. And in the industrial sector, while most markets shone, LA and Riverside saw exceptional capital value growth. The party may soon be over, however, with risk-free interest rates rising and yields set to follow, pointing to much slower capital growth ahead across the board.
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