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Tags: Moodys | Commercial | Property | Prices

Moody's: Commercial-Property Prices Surpass '07 Peak

Thursday, 06 November 2014 06:07 PM EST

U.S. commercial-property prices have surpassed the peak reached seven years ago, before the financial crisis sent real estate values plunging, Moody’s Investors Service Inc. said Thursday.

The Moody’s/RCA Commercial Property Price Indices national all-property composite index rose in September to 0.2 percent higher than its November 2007 level, Moody’s said. The gauge has recovered a loss of more than 40 percent since its January 2010 trough, according to the New York-based company.

Apartment complexes in large cities and office buildings in central business districts led the recovery, according to Moody’s. Higher values were driven by increased availability and a lower cost of capital, and a decline in distressed transactions. The apartment sector benefited from low borrowing costs, particularly from mortgage lenders Fannie Mae and Freddie Mac, the research company said in a statement.

“Multifamily sprang back quicker, since it only had a few quarters where there was a contraction in debt available,” Tad Philipp, director of commercial real estate research at Moody’s, said in a telephone interview. Other property types “took longer to come back because the liquidity took longer to come back.”

Apartment prices now exceed their pre-crisis peak by almost 18 percent, Moody’s said. In the past year, the best-performing core commercial property type has been office, with prices increasing almost 18 percent. Retail prices have had smaller gains, with a 5.3 percent increase in the past 12 months.

© Copyright 2022 Bloomberg News. All rights reserved.


Economy
U.S. commercial-property prices have surpassed the peak reached seven years ago, before the financial crisis sent real estate values plunging, Moody's Investors Service Inc. said Thursday.
Moodys, Commercial, Property, Prices
231
2014-07-06
Thursday, 06 November 2014 06:07 PM
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