Commercial Property Prices Rise 4.3%

Washington, DC, Nov. 23, 2010 -- Commercial property prices in the U.S. rose 4.3% in September from the August, the biggest gain in a decade of records, according to Moody’s Investors Service.

The Moody’s/REAL Commercial Property Price Index rose 0.3% from a year earlier as a small number of high-priced deals drove up values, Moody’s said in a press release. The measure had fallen to an eight-year low in August.

“Each of the summer months this year recorded declines in the 3% to 4% range, followed by this month’s sizeable uptick,” Nick Levidy, a Moody’s managing director in New York, said in the release.

“The relatively large swings seen in the index recently are due in part to the uncertain macroeconomic environment and the effects of a thin market with low transaction volumes.”

The Moody’s index is still 43% below its October 2007 peak. The index measures overall commercial property values on a monthly basis and breaks the numbers down by property type once each quarter. The changes are based on repeat sales transactions.

Apartment buildings have led prices higher, rising almost 16% in the third quarter from a year ago. An index of retail properties fell about 12% in that time, while industrial buildings dropped 1.2%. Office property values increased 4.4%.