Commercial Cataclysm!: Moody’s/REAL Commercial Property Price Index August 2010

The latest release of the Moody’s/REAL Commercial Property Index showed a notable monthly decline of 3.3% since July suggesting that the nation’s commercial property markets are continuing to slump through a tremendous downturn that has seen prices down some 45.31% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc and Real Estate Analytics LLC.

Bull Trip!: GDP Report Q1 2009 (Advance)

Today, the Bureau of Economic Analysis (BEA) released their first installment of the Q1 2009 GDP report showing a striking contraction with GDP declining at an annual rate of -6.1%.

Easily the most notable features of today’s report are the stunning declines to residential and non-residential as well as exports of both goods and services.

Fixed investment provided significant drags on growth with non-residential investment declining a whopping -37.9% and residential investment plunging -38.0% while net exports of goods and services declined -30.0%.

Making a positive contribution to GDP were equally stunning declines to imports of goods and services slumping -34.1% as well as positive personal consumption expenditures increasing 2.2%.

The following chart shows real residential and non-residential fixed investment versus overall GDP since Q1 2003 (click for larger version).

Commercial Cataclysm?: Moody’s/REAL Commercial Property Price Index January 2009

The latest results of the Moody’s/REAL Commercial Property Index strongly suggests that the nation’s commercial real estate markets are now firmly experiencing a tremendous downturn with prices plummeting a whopping 19.08% on a year-over-year basis and a stunning 21% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc.

Commercial Catastrophe?: MIT/CRE Commercial Property Index Q4 2008

It’s now perfectly obvious that the commercial real estate (CRE) markets have inevitably followed the lead of the residential markets down into an historic recessionary decline.

Today, the MIT Center for Real Estate released their latest read on the nation’s commercial property market showing a steep 15.01% year-over-year decline to prices and a 23.06% decline in demand.

Worse yet, on a peak basis CRE prices have declined a staggering 21.94%.

Individually, Apartment property prices declined 16.34%, Industrial property prices declined 17.24% and Office property prices declined 18.32%.


Looking at the supply and demand indices of the “All Properties” index appears to shed some light on the factors now working to drive prices lower.

Notice that supply of retail properties has remained elevated in recent quarters, while demand has continued to deteriorate substantially.

Commercial Calamity? S&P/GRA Commercial Real Estate Index September 2008

Standard & Poor’s tracks commercial real estate (CRE) prices for various commercial property types.

Today’s results indicate that the commercial real estate decline has firmly arrived and it is notable with a marked decline for most components with three of the four now showing annual declines resulting in the third consecutive year-over-year decline to the total index, marking the first such decline in the indexes history.

It’s important to keep in mind that this decline is coming from data that was settled well in advance of the historic stock market and wider macroeconomic crisis which, in all likeliness, will result in significant additional downward pressure on commercial real estate prices.

Clearly, commercial real estate, having already matched and surpassed the level of decline seen after the dot-com bust, now sit poised on the verge of an unprecedented slump.

The charts below show the National index and the component indices since 1994 (click for larger).

NOTE: S&P has advertised that this particular index will now be discontinued… I’m following up with a phone call and will update this post with details.

In future months I’ll continue to post the MIT/CRE and Moody’s commercial property indices in order to get a sense of CRE market pricing conditions.

Commercial Calamity? S&P/GRA Commercial Real Estate Index August 2008

Standard & Poor’s tracks commercial real estate (CRE) prices for various commercial property types.

Today’s results indicate that the commercial real estate decline has firmly arrived and it is notable with a marked decline for all components with three of the four now showing annual declines resulting in the first year-over-year decline to the total index on record.

It’s important to keep in mind that this decline is coming from data that was settled well in advance of the historic stock market and wider macroeconomic crisis which, in all likeliness, will result in significant additional downward pressure on commercial real estate prices.

Clearly, commercial real estate, having already matched and surpassed the level of decline seen after the dot-com bust, now sit poised on the verge of an unprecedented slump.

The charts below show the National index and the component indices since 1994 (click for larger).