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Moody's: US commercial real estate prices resume steep declines in July
New York, September 21, 2009 --
Commercial real estate prices as measured by Moody's/REAL Commercial Property Price Indices (CPPI) renewed its steep declines and low transaction volume in July, Moody's Investors Service reports. The CPPI was down 5.1% from June after having declined by only 1% the prior month. It is now 30.8% below what it was a year earlier and 38.7% below the peak measured in October of 2007.
Overall market transaction volume continued the pattern of calendar 2009. "The market has averaged about 375 sales per month for the seven months in 2009," said Moody's Managing Director Nick Levidy. "Over the same time period in 2008, sales were averaging nearly 1,100 a month."
Moody's Regional Property Type Indices show prices for apartments in the East performing significantly better than in other regions (and also better than other property types in the East). In the East, apartments have declined 6.0% in the past year, and 10.5% in the past two years, which is smaller than the decline of any other regional property type for just one year. Nationally, apartment sector prices have declined 24.4% in the past year.
Southern apartments have posted the steepest drop over the past year, at 44.2%.
Florida apartments have also seen dramatic declines in the past four quarters, declining 39.8%. Florida apartment prices are now 49.8% from their peak prices.
Other notably weak markets the Indices point to are the office and industrial markets in Southern California. In that area, office values have declined 25.8% and industrial values 24.2% since a year ago.