According to Moody’s Investors Service, the United States commercial property price increase by 1.3 percent in October from the preceding month, the second successive monthly gain. Moody’s/REAL Commercial Property Price Index was up by 3.2 percent year-on-year prices.
The report reflects commercial property price increase due to a fast and rising demand for commercial space, as well as for office buildings in major markets in the U.S., including Washington, San Francisco, and New York, where potential buyers look for profits higher than permanent income.
Grubb & Ellis Co’s chief economist, Robert Bach said investors can start acquiring low-standard commercial buildings in most major markets and high-standard buildings in any secondary markets by next year.
Bach also said investor interests have been focused to prime properties in primary, supply-controlled markets, while distress properties are still widespread.
Moody’s/REAL commercial property price index is still 42 percent lower than October 2007’s peak. The gauge measures the general commercial property price monthly, and breaks the figures down by every property type once every quarter. The adjustments are based on recurring sales transactions.
A report by Real Capital Analytics Inc, a research firm based in New York shows that commercial property sales in the U.S doubled to $16 million for the third quarter 2010 compared to the figures a year earlier.
Commercial property price for office buildings in the East of U.S gained about 22 percent from last year, according to Moody’s report. Commercial property price for buildings in New York rose 9 percent, and Washington properties climbed 17 percent.