US commercial property prices recorded their biggest monthly gains on record in September, offering hope that the troubled market is bottoming out.
According to the Moody’s/Real commercial property price index, prices rose by 4.3 percent from August to September, lifted by increases in the apartment and retail sectors.
That was the largest rise in the 10-year history of the index after a summer when prices fell for three consecutive months.
Prices are up 0.3 percent compared with September a year ago.
In spite of the rebound, commercial property priceshave been volatile and the sector’s path to recovery remains steep.
Across the US, prices are off by 42.7 percent from their peak in October 2007, when the market began to slide.
“The relatively large swings in the index in recent months are due in part to the uncertain macroeconomic environment and the low number of repeat-sale transactions,” said Nick Levidy, managing director at Moody’s.
Mr Levidy was cautious on whether September was bottom of the market but said it appeared to be nearing an “inflection” point.
He noted that dominant mall spaces and “trophy” assets in top markets such as New York were outperforming the rest of the commercial property sector.
Renewed strength in retail property, where prices were up by 5.7 percent in the last quarter, gave a boost for the wider commercial sector.
A small rise in apartment prices provided a lift but there was continued weakness in demand for office and industrial buildings.
Commercial real estate was among the hardest-hit sectors during the recession, as waves of job cuts and weaker output reduced demand for office, shopping and warehouse space.