Moody’s: Commercial Property Prices Down 16 Percent

Any time talk turns to "indices," eyes glaze over. It’s a documented fact.

Be that as it may … Moody’s REAL Commercial Property Price Index is now "over 16% below the peak measured in October 2007," according to its just-released February report. Most of that decline (15 percent) happened in 2008, wiping out "the gains experienced in 2006 and 2007, and puts prices back to 2005 levels." And, "the total dollar volume of repeat sales activity in 2008 was less than half that of 2007."

The Moody’s indices "measure the change in actual transaction prices for commercial real estate assets based on the repeat sales of the same assets at different points in time."

Those assets are, per usual, divided into four classes: apartment, office, industrial and retail.

  • The national apartment market "is down almost 19% from the peak measured in the first quarter of 2007."
  • National office sector values "depreciated 13.5% in 2008, and are down over 14% from the peak measured in the second quarter of 2007."
  • "The industrial sector was the worst performer of the four national property types for 2008…This property type peaked at the end of 2007 and has fallen nearly 14% since."
  • And, "the national retail market was the best performer of the four property types. … National retail prices have depreciated almost 12% from the peak in the third quarter of 2007."

Mind you, there’s a bit of a time lag involved here. This report only includes data through the end of December. Not that anything’s changed much.

Moody’s: Commercial Property Prices Down 16 Percent