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Prices Dip After Three Months of Increases

NEW YORK CITY-The Moody's/REAL Commercial Property Prices Indices were off in February after increasing between November 2009 and January, but the agency calls this 'unsurprising.'

By Paul Bubny | Updated on April 19, 2010

NEW YORK CITY-It’s still too early in the recovery for any uptick in commercial pricing to be sustainable, Moody’s cautioned in its three preceding reports on the monthly changes in the Commercial Property Prices Indices. Sure enough, Monday’s CPPI report for the month ending Feb. 28 broke a three-month streak of increases, and the ratings agency says a seesaw effect will be evident in the market for some time.

“From November to January, commercial real estate prices increased by an aggregate 6.3%,” writes Nick Levidy, managing director at Moody’s, in the new report. “As noted in our previous reports, however, we did not feel that these increases were sustainable in the short term, particularly given current low transaction volumes. With continued low volume in February and a larger proportion of repeat-sales considered distressed, it is unsurprising that prices have once again headed lower.”

The National All Property Type Aggregate Index measured a 2.6% price decline in February. This marks the first time prices have fallen since October of last year, Moody’s says.

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