Market Watch
New database equates walkability with higher value
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Market Watch
Monday, April 27, 2015
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Real Capital Analytics (RCA), a provider of commercial real estate analytics, recently announced the launch of its RCA & Walk Score Commercial Property Price Indices (CPPI). The CPPI is the first of its kind to quantify the price value of walkability for commercial properties. Walk Score is a single comparative measure of the ease or “walkability” from a given property location to nearby amenities.
“Walkability matters, as prices for commercial properties in highly walkable locations show significantly greater appreciation trends than car-dependent locations,” RCA founder Robert White said. “The findings cut across both urban and suburban locales; large and small markets; and each of the office, retail and apartment sectors.”
Over the past decade, prices for properties located in Central Business Districts have risen 125 percent, while prices for suburban properties that also are considered highly walkable are up 43 percent. Comparatively, property prices are up just 21 percent to 22 percent for properties in suburban locations that are determined to be either somewhat walkable or car dependent.
The findings support growing evidence that demographic shifts and preferences have shifted back to urban locations and more dynamic live/work/play environments. The stronger price appreciation trends associated with highly walkable properties reflect both a premium in rents that tenants pay for such locations as well as the increasing demand from investors who recognize the long-term value of walkability and mixed-use developments.
The new indices will be calculated on a quarterly basis and will be generated by Walk Score’s property database.
The RCA & Walk Score CPPI are based on research undertaken by David Geltner of M.I.T., Jeffrey Fisher of Indiana University, and Professor Gary Pivo of the University of Arizona.
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