Commercial Property Prices Rise

Click here to find out more!Commercial property prices rise for second month in a row, report says


February 22, 2010 | 12:20 pm
Commercial real estate prices in the U.S. moved up significantly in December compared with November, according to Moody’s Investors Service. The 4.1% rise was the largest month-to-month gain on record since the Moody’s/REAL Commercial Property Price index was started in 2000.

“Although we are unable to conclude that the bottom is here, we do feel that the period of large price declines is over,” said Nick Levidy, managing director of Moody’s and the main author of Monday’s report.

December marked the second consecutive month of improvement, but prices for office, retail, industrial and apartment buildings are still down sharply from recent highs. Prices were 29% higher in December 2008 and 41% higher during their 2007 peak, Moody’s said.

The report has one more caveat – recovery of the commercial real estate market will depend on the continued recovery of the broader economy.  A turn for the worse or sharply higher long-term interest rates could drive prices back down and reduce the number of transactions.