Monday, June 2, 2008

March 2008 CPPI down 2.3 percent according to Moody's

The Moodys/REAL commercial property index (CPPI) is a periodic same-property round-trip investment price change index of the U.S. commercial investment property market based on data from MIT Center for Real Estate industry partner Real Capital Analytics, Inc (RCA).

The latest results of the Moodys/REAL CPPI show a decrease of 2.3% in March for the all properties national index. All four national property sectors are down from their peak prices of 2007 (with peaks in different quarters of last year for different property types). Retail is down the most from its peak, -5.7%, while offices and industrial are down the least, by -2.0% and -2.3% respectively. Apartments are in the middle, with price declines of -3.4% since that asset type's peak a year ago in the first quarter of 2007.

Here is the Reuters press release:

Moody's said prices of retail properties have dropped 5.7 percent from their peak in 2007, compared with declines of 3.4 percent for apartment buildings and 2.3 percent for industrial real estate, respectively. Office property prices are down 2 percent from their peak, according to quarterly data.

On a monthly basis, commercial property prices fell 2.3 percent in March, the most since Moody's began collecting the data in 2000. Values were 2.6 percent below their October 2007 level, but still up 0.9 percent from a year ago, Moody's said.

The impact of a slowing economy and forecasts of a 20 percent drop in commercial property prices from their peak by Moody's and JPMorgan Chase & Co in the first quarter led to steep price drops on securities backed by commercial real estate. However, prices on commercial mortgage-backed securities have since climbed amid expectations the selling overstated the losses that would occur.

Fitch Ratings said delinquencies on CMBS rose slightly, to 0.35 percent in April from 0.33 percent in March. Fitch analysts said they are most concerned with retail and hotel properties even though delinquencies in those sectors decreased marginally.

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source: US Commercial property price fall most since 2000 -Moody's
Reuters, Mon May 19, 2008 11:34am ED

source: Moodys/REAL Commercial Property Index (CPPI): May Update
May 30, 2008

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