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Commercial Real Estate Watch

Posted in Debt Markets, Real Estate Markets by teslik on August 13, 2009


The chart above, from MIT’s Center for Real Estate, traces the Moody’s/REAL commercial property index, or CPPI, an index of commercial investment property prices in the United States. As you can see, prices are falling quite sharply. The AP reports commercial property mortgage defaults are climbing at an “unparalleled pace” (and the Fed is feeling the pain alongside private investors). The AP piece adds that the delinquency rate on securitized debt backed by commercial property rose to roughly 3 percent in the second quarter, and that banks hold about $3.5 trillion of commercial real estate loans. Let’s hope this isn’t shades of U.S. housing markets circa 2007.

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