commercial property prices drop
U.S. commercial real estate prices dropped in January for the first time since 2010, a sign of weakening demand by investors after a six-year rally that pushed values to records.
The Moody/RCA Commercial Property Price Index slipped 0.3 percent from December, Moody’s Investors Service said in a statement Monday. The decline was led by office and industrial buildings, which each had a price drop of more than 1 percent.
“This is a significant milestone that signals that a shift in sentiment among commercial-property investors is under way,” Moody’s said in the statement.
The Moody’s index has almost doubled since its January 2010 trough and is about 17 percent higher than its previous peak, as low interest rates and rebounding economic growth fueled property demand. Prices have jumped the most for office buildings in top cities such as New York and San Francisco, more than tripling since the market’s bottom
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