MOODY’S REAL COMMERCIAL PROPERTY PRICE INDEX DECLINES 5.5% FOR JANUARY

Moody’s lates REAL commercial property price index is a stark reminder of the current financial situation. Showing a 5.5% drop in prices in January, this is the largest one-month drop in the history of the index.

Prices declined 19.15 from January 2008, and 21% from their peak in October 2007 and have now returned to 2005 levels. Considering the banks have shown losses in the order of the last ten year’s profits, it is realistic to expect this trend to continue as their commercial losses will only start appearing on their books this year. Expect some big ones.

While it is unsettling to see the sharp deterioration of commercial real estate values, the CPPI continues to perform as an accurate and timely benchmark for the asset class. The data for January show the largest drop since we began calculating the Index, and reveals that declines are accelerating and permeating all regions and property types.” Neal Elkin, President of REAL.

The full report is available for download here – REAL indices