Walking to Higher Value, a new report from Real Capital Analytics, demonstrates the importance of walkability — a property’s location to nearby amenities — in asset appreciation. Launched April 15, the RCA & Walk Score Commercial Property Price Indices quantify the price value of walkability for commercial real estate across U.S. property types through four indices: highly walkable CBD, highly walkable suburban, somewhat walkable suburban and car-dependant suburban.
According to the RCA report, highly walkable urban and suburban locations demonstrated a trend toward significantly greater commercial property price appreciation than car-dependent areas, not only in large and small markets but across the office, retail and apartment sectors:
“The findings support growing evidence that demographic changes and tenant preferences are shifting back to urban locations, but they also underscore that the trend is not solely urbanization. Even in the suburbs, dynamic live/work/play environments, which are associated with high walk scores, also have superior price trends. Thus, large mixed-use developments may become more common and sought after in the future.”
Of CBD locations, the highest walkability premiums are in the six major metros of New York City; Boston; Washington, D.C.; Chicago; San Francisco; and Los Angeles.
So investors’ quest for property value appreciation is alive and well in commercial real estate markets, putting the live, work, play phenomenon to the test in their search for the best assets to buy and sell — hopefully at a profit.
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Jennifer Molloy is editor of The Institutional Real Estate Letter – Asia Pacific.
