Commercial property prices inch higher in June
The price of commercial property inched up in June, representing a firming up of the bottom as continued market turmoil and less lending keep any significant gains at bay, according to Moody's Investors Service. The ratings agency said its commercial property price index increased 0.9% in June from the prior month. Analysts said the 254 repeat-sale transactions in June were the highest non-year-end level in about three years. Tightening of 10-year Treasury yield "has largely offset widening loan spreads, helping maintain attractive financing costs and increasing transaction volume." Although dollar volume rose just 3.2%, indicating a larger amount of trading smaller properties, according to Moody's. Distressed transactions accounted for 28.7% of all sales, higher than the two-year average of 25.9%. "The broad middle portion of the commercial real estate market (neither trophy nor distressed) continues to perform well, helping sustain positive movement in the aggregate index," according to analysts. Three of the four Moody's property type indices showed prices gains in the second quarter led by office space with a 8.9% gain, industrial 2.5% and apartments 0.6%. The retail space index fell 0.3% for the second quarter. Write to Jason Philyaw.