Distressed Versus Non-Distressed CRE Prices

Posted March 23, 2011

This is a tale of two very different worlds. Moody’s Investor Services reports that larger properties in major markets are recovering nicely while distressed properties remain well off of their October 2007 peaks.

The Moody’s/REAL Commercial Property Price Index (CPPI), demonstrates a major variance in property values depending on asset quality. The CPPI shows prices overall to be down 42.8 percent from their October 2007 peak. Further analysis shows that major market properties, which have traded at $10 million or better, are down 18.9% from the October 2007 peak. Distressed properties in secondary markets are down 53.9 since the October 2007 peak.

Some of Moody’s sub indices are recording ample gains over the last year in markets in markets where values aren’t being pulled down by high levels of distressed sales.

DS News – Moodys Sees Vast Divergence – Distressed vs Non Distressed

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