Is there a bubble in commercial property?

It is questionable whether the surge in commercial property prices can be sustained. The rise in multi-family apartment prices, which explains a large part of the overall increase in commercial property values, is partly explained by the low vacancy rate, which is pushing rents higher. But prices have been increasing at a consistently faster pace than rents for several years now. The good news is that there is no obvious sign of over-building or excessive credit growth. Accordingly, even if prices do drop back, the impact on the broader economy should be modest.