Moody's CPPI rose 0.6% for November, down 4.3% since May
The price of commercial property rose 0.6% in November, marking the third-consecutive month of gains following sharp declines for the previous three months, according to Moody's Investors Service. The rating agency said its all property type aggregate index increased 6.4% over September, October and November after hitting a recession low in August. Still the gains of the fall did little to offset the drops that occurred over the summer, and the commercial property price index is down 4.3% since May. "The CPPI is likely to exhibit further choppiness in the months ahead," Moody's said. "A clear positive trend is unlikely to develop until markets become convinced that the recovery of the broader global economy has real staying power. Consistent growth, lower unemployment and low, stable bond yields will lead to greater transaction volumes and rising prices." Commercial property prices for November were 2.8% lower than a year earlier, 31.6% below two years ago and 41.6% off the peak, which occurred in October 2007, Moody's said. Analysts said about 24% of repeat sales included in the index were distressed sales, down slightly from the year average of 26%. "The overhang of distressed properties, the sale of which has comprised about one quarter of the transactions used to calculate the index for most of 2010, has also served to apply downward pressure on the index," Moody's said. Since the middle of 2009, commercial real estate prices have floundered some 39% to 45% below the October 2007 peak. Write to Jason Philyaw.