After three months on the rise, commercial real estate (CRE) average prices fell 0.9% in December, according to data released by Moody's Investors Service and Real Estate Analytics LLC. CRE average prices closed 2010 42% below their October 2007 peak.
Moody's says the decline in average prices was due to a decreased demand for office space, shopping-center space and apartment complexes, which made it more challenging for investors to attract financing for acquisitions. But the drop in prices was not mirrored in transaction activity: Moody's found that the number of deals in December was more than double the volume seen in November.
‘A robust, broad-based recovery in commercial real estate prices has remained elusive, although some major markets, particularly capital-attracting gateway cities, continue to show signs of strength,’ says Nick Levidy, Moody's managing director .
SOURCE: Moody's
