Wednesday, July 20, 2011

Jump in Commercial Real Estate Prices

Here is a Bloomberg article detailing a 6.3% jump in commercial real estate prices in May over April's prices.  I saw this article this morning but didn't read it until this evening when the large price jump figure hit me.  Here are the first three paragraphs of the article:

U.S. commercial property prices increased in May for the first time in six months as a rebound in distressed real estate helped boost values, according to Moody’s Investors Service.
The Moody’s/REAL Commercial Property Price Index rose 6.3 percent from April, the largest gain since the measure began in 2000. It’s down 11 percent from a year earlier and 46 percent below the peak of October 2007, the company said today.
The index, which measures broad price trends, had fallen to a record low in April as sales of distressed properties undermined real estate values. Distressed deals in May began contributing to rather than delaying a price recovery, according to the Moody’s report.
I know there is plenty of noise in a monthly price figure, but a 6.3% increase is still impressive.

The article also provides price data from Greenstreet and CoStar, both that showed year-over-year price increases.

1 comment:

Anonymous said...

Its a story of two markets and none of the data really is quite accurate. The investment market is up much more then 6% (maybe 20-30% in some markets). It's a totally different market for owner/user or vacant buildings. Down 20-50% depending on the market.