CPPI Data Show CRE Prices Continue to Slide

Commercial real estate prices continued to fall in May, down 7.6 percent for the month, according to the latest data from the Moody's/REAL Commercial Property Price Indices (CPPI).
The National All Property Type Aggregate Index, a measure of property prices across all sectors and regions, has declined almost 35 percent from the market peak of October 2007. The Index's May 2009 level represents a 28.5 percent decline from the year-earlier period.
Transaction volume also continued to decline in May, reaching its lowest level ever. Just 282 transactions occurred in the entire month. Of those, only 52 were repeat-sales transactions, which are used to calculate the index series. The repeat sales had a total value of $400 million, a seven-year low.
In a report accompanying the data, Moody's researchers indicated that the new results did offer some positive signs. "Large commercial real estate price declines in the last two months suggest that a bottom may be starting to form, although higher transaction volumes would be necessary in order to draw any more definitive conclusions," the report said.