Newspaper article THE JOURNAL RECORD

Commentary: Commercial Real Estate Prices Experience Slight Decline in December

Newspaper article THE JOURNAL RECORD

Commentary: Commercial Real Estate Prices Experience Slight Decline in December

Article excerpt

After having experienced three months of increases, average commercial real estate prices took a slight step backwards in December as prices fell 0.9 percent from a month earlier, according to data released Tuesday by Moody's Investors Service and Real Estate Analytics LLC. Even with the increases seen in September, October and November, Moody's said average prices at the end of 2010 were 42 percent below their peak that was seen in October 2007.

Moody's attributed the change in average prices to the decline in demand for office space, shopping center space and apartment complexes. This has put pressure on commercial property values, which in turn has made it difficult for investors to secure financing for acquisitions.

Moody's Managing Director Nick Levidy said the following:

"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."

Even though prices declined, transaction activity did not. …

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