NEW YORK – U.S. commercial real estate prices dropped in January for the first time in six years, a sign of weakening demand by investors.
The Moody/RCA Commercial Property Price Index slipped 0.3 percent from December. The decline was led by office and industrial buildings, which each had a price drop of over 1 percent.
"This is a significant milestone that signals that a shift in sentiment among commercial-property investors is under way," according to a statement released by Moody's.
Volatility in financial markets may be hurting real estate demand. Jon Gray, head of real estate for Blackstone Group, said rates of return are falling, and it's "very difficult" to bundle and sell real estate loans, hindering debt financing for transactions.
Our twice-weekly e-newsletter provides a quick overview of Texas real estate markets. Because your time is valuable.