Is US Commercial Real Estate Sinking To New Lows Or Zooming Towards Its Old Peak?
Amazingly enough, the two leading indices of commercial real estate (CRE) in the US are completely at odds regarding this. Broadly based Moody's Investors Service that tracks closing prices of a broad base of CRE finds that as of the end of March average CRE prices were 47% below their peak observed in October, 2007 and still sinking, http://www.calculatedriskblog.com/2011/05/moody's-commercial-real-estate-prices.html . OTOH, Green Street Advisors who track reported prices of a subset of CRE that is owned by 80 leading REITs find that after peaking in mid-2007, CRE declined to a low point at 60% of that level in November, 2009, when it turned around and is now at 90% of the peak level and readily rising, http://www.greenstreetadvisors.com . The data from this source has led some to even declare that the wonderful performance of the supposedly more free market CRE compared to the ongoing slump in residential real estate shows how government interventions in housing markets ha...