DOW JONES NEWSWIRES
Summary of article: CRE prices fell in September after a quarter of growth. Expect ups and downs in pricing over the next several years.
Important quotes from article:
U.S. commercial real-estate prices fell 1.4% in September, ending a four-month growth streak, according to Moody's Investors Service, which expects the "bottoming process" for the sector to continue for the next two years.
Prices in the sector remain near its two-year average price level, Moody's said.
Still, Moody's expects "multi-family and hotel properties to lead the price recovery," said Nick Levidy,
Moody's managing director. "Office and retail will lag mostly because of a very high number of vacancies and the burn-off of above-market rent leases."
Read the whole article from Commercial Real-Estate Prices Fell In September
A. Joseph Marshall
Coldwell Banker Commercial
Commercial Real Estate Advisor
Savannah, Ga
Showing posts with label Moody's. Show all posts
Showing posts with label Moody's. Show all posts
Wednesday, November 23, 2011
Friday, July 22, 2011
Moody's Rose Colored CRE Reports Just Keep on Comin'
Moody's Investor Service reported on the 20th that the Commercial Property Price Index rose 6.3% since April 2011. I know this report is only for May and that they must publish monthly data. And I know that they're in the "publish or perish" industry. Furthermore, I know they do a good analytical job.
My beef with them (and others like them) is that the peculiarly focused minutia they report is memed all over the web as a clarion of good or bad news. For example, with this particular report, would the data have been as optimistic if they had included March (when the government passed a bill on the 2nd to keep the government open for another 2 weeks)? In March the Obama administration was grilled about it's trade relations with South Korea, China, etc... while it sought to "level the playing field." China also attacked the dollar and Chinese inflation went global. The news wasn't much better in April, but at least the goverment wasn't at risk of "shutting down."
So what does this have to do with CRE? It matters because commercial real estate doesn't operate outside of economic conditions. To over-simplify the issue, if there are really bad CRE and economic reports in March, and better reports in April, then yes of course data will look better if studied from April.
In fact, commercial real estate news in April was delusional at best. It was at the end of March that PwC released that stupid report which said CRE was improving because investment properties were selling faster. How can a blip in investment sales mark a glorious rise in the commerical real estate market? There was that much touted "self-sustaining recovery" report by Grosvenor. Contrarily, on March 22nd, Moody's reported that CRE prices decreased 2 months in a row.
More over Moody's tracks properties around the $3 million mark and up. It is no wonder then that prices appear to have increased in May when top tier properties and segments are propelling the market. Are they really giving us the whole picture? The Moody's report perhaps should've read "U.S. Commercial Property Prices Increased for Top Tier Properties in Desirable Markets by 6.3% in May." It's not catchy but at least we'd know what they're currently not telling us.
A. Joseph Marshall
Commercial Real Estate Agent
Savannah, Ga.
My beef with them (and others like them) is that the peculiarly focused minutia they report is memed all over the web as a clarion of good or bad news. For example, with this particular report, would the data have been as optimistic if they had included March (when the government passed a bill on the 2nd to keep the government open for another 2 weeks)? In March the Obama administration was grilled about it's trade relations with South Korea, China, etc... while it sought to "level the playing field." China also attacked the dollar and Chinese inflation went global. The news wasn't much better in April, but at least the goverment wasn't at risk of "shutting down."
So what does this have to do with CRE? It matters because commercial real estate doesn't operate outside of economic conditions. To over-simplify the issue, if there are really bad CRE and economic reports in March, and better reports in April, then yes of course data will look better if studied from April.
In fact, commercial real estate news in April was delusional at best. It was at the end of March that PwC released that stupid report which said CRE was improving because investment properties were selling faster. How can a blip in investment sales mark a glorious rise in the commerical real estate market? There was that much touted "self-sustaining recovery" report by Grosvenor. Contrarily, on March 22nd, Moody's reported that CRE prices decreased 2 months in a row.
More over Moody's tracks properties around the $3 million mark and up. It is no wonder then that prices appear to have increased in May when top tier properties and segments are propelling the market. Are they really giving us the whole picture? The Moody's report perhaps should've read "U.S. Commercial Property Prices Increased for Top Tier Properties in Desirable Markets by 6.3% in May." It's not catchy but at least we'd know what they're currently not telling us.
A. Joseph Marshall
Commercial Real Estate Agent
Savannah, Ga.
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