Posted by: BayAreaComRE | February 22, 2010

Moody’s/REAL Commercial Property Price Index Measured 1.0% Gain

The good news is the US Commercial Real Estate Market saw a 1% increase in the CPPI (Commercial Property Index) calculated by Moody’s and REAL Capital Analytics. The bad news is we have 43% to go to get back to the apex in 2006. Moody’s expects the market to bottom out soon, but commercial real estate prices will level out 30% – 40% below their peaks.

Moody’s publishes this index on a montly and quarterly basis, in conjunction with MIT Center for Real Estate and Real Estate Analytics, LLC. The data for this latest report goes through November 2009.

San Francisco prices declined at a significantly lower rate than our counterparts in New York and Washington D.C. last year, albeit they have a larger index. San Francisco dropped 21.3% in this index, which is based on closed transactions, while D.C. and New York dropped 27% and 38.1% respectively. The graph below illustrates the national trends compared with three of the major markets included in the MSA (metropolitan statistical area).

We covered their last report, which showed prices dropping to 2002 levels in the 3rd Quarter. Check out our previous story here. The pain has basically slowed its pace, with monthly declines as much as 7%, and the bright spot of a 1% increase through November will likely be short-lived.


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