CRE pricing measures diverge.

Position:Commercial

Commercial property price indexes diverged in early 2016 as Moody's Investors Service and Real Capital Analytics Inc. (RCA), both based in New York, observed price declines while Green Street Advisors, Newport Beach, California, and CoStar Group Inc., Washington, D.C., saw slight price increases.

The Moody's/RCA Commercial Property Price Index's broadest measure slipped 30 basis points in January--its first decline since early 2010. Moody's and RCA measure price changes based on completed sales of the same properties.

"Commercial property price growth in the U.S. has paused six years into the post-crisis recovery," said Moody's Director of Commercial Real Estate Research Tad Philipp. "We consider this a significant milestone that signals that a shift in sentiment among commercial property investors is underway."

The decline came from an 80-basis-point decrease in core commercial prices over the past three months, Philipp said. Office and industrial property prices each fell by more than 1 percent in January.

But Philipp said apartment property prices continue to rise, with prices up 70 basis points in January and 2.7 percent over the past three months.

Real estate research firm Green Street Advisors said its Commercial Property Price Index increased 1 percent in February, but noted...

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