The price of commercial property fell 1.2% in January, the second month of declines after a few months of gains, according to Moody's Investors Service. The ratings agency said its commercial property price index is now 42.8% lower than its October 2007 peak and 4.2% higher than its August low. "Choppiness in the CPPI is starting to subside as the bottoming process that started in the (fourth quarter of '09) continues," according to Tad Philipp, Moody's director of real estate research. "However, some choppiness will remain as the share of distressed transactions continues to be elevated." (Click on chart to expand.) The bifurcation of the U.S. commercial real estate market continues, with "larger properties in major markets recovering while distressed properties remain well off the peak." Moody's analysts said prices on distressed properties are down nearly 54% since the October 2007 peak. Office prices in New York and Washington have bounced back considerably from a year ago, Moody's said, with gains of 33% and 21%. Prices for apartments, office space and retail in the East all realized gains of at least 17% over the past four quarters, according to Moody's. Meanwhile, San Francisco office prices are down 10% from a year earlier, due to a significant share of distressed sales, especially in suburban markets of the Bay Area. Office property prices in Southern California are down 17% from a year ago, and retail property prices are 5.1% lower. In the South, apartment property prices rose almost 54% over the past year and industrial property prices climbed about 40%, while office prices are down 11% and prices of retail spaces fell 16.5%. Moody's analysts said distressed properties accounted for 26% of repeat sales in January, which is on par with recent months. "While reflective of the overall property sales market at this time, the National All Property Index is unlikely to demonstrate much upward momentum until the share of distressed sales diminishes," Moody's said. Write to Jason Philyaw.