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Commercial Prices Bounce Along the Bottom

NEW YORK CITY-REAL's Elkin says nationwide price declines following a few months of gains fit expectations at this point in the recovery.

By Paul Bubny | Updated on May 24, 2010

NEW YORK CITY-After trending upward for three consecutive months between November 2009 and January of this year, the monthly Moody’s/REAL National All Property Type Aggregate Index followed a decline in February with another dip in March, according to a report released Monday. Neal Elkin, president of Real Estate Analytics, tells GlobeSt.com he’s “not at all surprised.”

Even as the market began to stabilize, “Given a lot of the conflicting pressures on pricing in the asset classes, our view has been that bouncing along the bottom would be the most likely scenario,” says Elkin, whose firm prepares the Commercial Property Price Indices for Moody’s using Real Capital Analytics data. “These types of gyrations–up a little bit, down a little bit, up a little bit—are consistent with that.”

With March’s index slipping 0.5%, following a 2.6% decline in February, commercial property prices are now down 24.9% from 12 months ago and 42.1% from their October 2007 peak. The quarterly indices for property types show retail declining the most in the first quarter, with a 4.7% drop. Office, which had been the best performing sector, dropped 3.2% in Q1.

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