It's inherent to the real estate cycle that investment market opportunities and risks fluctuate over time. How do you assess risk-on versus risk-off market conditions? Or which markets are prone to a boom or bust? A great place to start is with Boxwood Means' Small Commercial Price Index (SCPI). As one of the nation's leading providers of small-cap CRE asset valuations and data analytics, our SCPI metrics at the national and metro levels offer lenders and investors current and historical insights into local asset price trends that are invaluable and simply unavailable from any other source.
Whether for the housing or commercial real estate markets, in general, price indices serve as a barometer of the overall strength or weakness of local markets.
In addition to its focus on small-cap CRE, what makes Boxwood Means' SCPI special is its reach and model framework.
Across more than 150 metropolitan statistical areas (MSAs) — as far north as Portland, ME and as far west as San Francisco and Los Angeles — SCPI gives you a topographical view of the peaks and valleys of property price changes that are key to understanding and estimating the potentialities of asset performance over time. The same goes for our separate indices of small multifamily asset prices, or SMPI, across 100 metro areas.
In a practical sense, both Boxwood time-series indices are indispensable tools for rapidly marking assets to market, monitoring credit risk, or creating investment hierarchies or classifications of local markets by diverging performance.Download Metro Coverage List DOWNLOAD PRODUCT SHEET
SCPI is more targeted than most real estate indices by tracking commercial property sales transactions priced specifically at $5 million or less.
All real estate is local, but it isn't enough to simply have a vast database of sales transactions that would allow us to assess the tenor of the commercial real estate market on a metro-by-metro basis. Our data and analytics also need to be reliable, precise, and reflective of actual market conditions. We are able to get an accurate read on price points by adhering to conventional, well-established valuation techniques that have stood the test of time, where comparable property sales are modified in accordance with a given property's attributes and overall condition. We build on this tried-and-true framework with contemporary data analytics that provide added context. This is made possible through multivariate hedonic models–statistical methods that are also routinely applied to other time-series measures like the consumer price index, among other indices. Multivariate hedonic modeling enables us to more systematically estimate the influence that variables such as location, property use, construction type and vintage have on sales prices. Once we develop this data, we use it to create price indices that are comparable across all metro areas and over time as well.
Contact us today to subscribe to SCPI or for more information about our products and services.