U.S. commercial real estate (CRE) prices recorded a 0.9% increase in June, the second consecutive positive monthly uptick, according to Moody's REAL Commercial Property Price Index. The volume of repeat sales of the same property was the highest non-year-end level since 2007.
June's total transaction count of 254 was the highest non-year-end level since 2007 in the run-up to the market's peak. However, transaction volume by dollar balance only increased by 3.2% in June, showing a greater amount of trading of non-trophy properties.
Moody's also reports that during the second quarter, three of the four national property type indices posted price increases, with the office sector increasing 8.9%, industrial rising 2.5%, and apartment up 0.6%. Retail posted a small decline of -0.3%.
Moody's Six-City Index of major assets in major markets saw a second consecutive month of price decline in June, as this market cools off after a yearlong run-up in prices. Meanwhile, distressed transactions still account for a near record share of all transactions at almost 29%.
‘The June increase represents a firming up of the market bottom, but turmoil in the capital markets and a drop-off in commercial mortgage-backed securities lending may delay realization of significant near-term pricing gains,’ says Tad Philipp, director of CRE research at Moody's.
