Commercial Real Estate Values Move Higher

Cambridge, MA, Nov. 3, 2009--An index of commercial real estate sales values  turned higher in the third quarter.

Prices of properties sold by institutional investors rose nationwide by more than 4 percent in the quarter, the MIT Center for Real Estate said.

It was the first such jump in commercial real estate prices in more than a year and the biggest quarterly increase in more than two years.

“One quarter does not a trend make, and we are still well below normal trading volume,” David Geltner, director of research at MIT’s real estate center, said in the new report. “Nevertheless, this is the strongest sign of a bottom that we’ve had in two years.”

Along with the increase in purchase prices, the MIT index also showed that prices investors said they are willing to pay were up a “robust” 12 percent – the first such increase in eight consecutive quarters.

The MIT price index tracks sales of commercial properties including shopping centers, apartment complexes and office towers.

Commercial property values at the end of the third quarter were 36.5 percent below their 2007 peak, according to MIT’s index. But that’s an improvement from the 39 percent value loss at the end of second quarter 2009.