Moody’s: Commercial Real Estate Prices Up 2.4% In August

Moody's: Commercial Real Estate Prices Up 2.4% In August U.S. commercial real estate prices rose 2.4% in August, according to new data measured by the Moody's/REAL National Commercial Property Price Index (CPPI).

August's data is the fourth consecutive month of price increases and brings the CPPI 15.3% above the post-peak low set in April. Much of the improvement in the index in August came from a reduction in the share of distressed transactions, which were 21.7% of the repeat transactions that the CPPI measures, down 5.9% from July. Prices for distressed transactions were down by 3.5% from July and were only 6.9% above the post-peak low set in August 2010.

Transaction volume remained high in August at 207 repeat-sales observations. The average monthly transaction count for 2011 to date is 185, as compared with 144 during 2010 and 96 during 2009.

‘Although distressed sales may be near their high-water mark for this cycle, we don't foresee any significant increase in commercial real estate prices over the near term,’ says Tad Philipp, Moody's director of commercial real estate research, who also predicted that commercial mortgage-backed securities loan origination will decline in the coming months.

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